**EUR/USD Technical Analysis: Focus Shifts to US Economic Data**
*Based on original article by InvestingLive.com*
The EUR/USD pair remains near its recent low, trading around the 1.0680 level as traders and investors await the latest round of US economic data for further direction. With central bank decisions largely out of the way, market participants are now shifting focus to macroeconomic fundamentals, particularly from the United States, to assess the next movements for the currency pair.
This comprehensive technical and fundamental analysis explores the current condition of the EUR/USD pair, what recent data tells us, and how upcoming US reports may influence near-term price action.
## Current EUR/USD Price Action
As of the latest trading sessions, the EUR/USD:
– Is fluctuating near 1.0680, showing limited recovery efforts following the recent sell-off.
– Is trapped under key resistance levels, particularly around the 1.0750 region.
– Has been making lower highs and lower lows for several sessions, indicating persistent bearish pressure.
The inability of the pair to reclaim the 1.0700-1.0750 zone reveals that sellers remain in control, at least in the short term.
## Recent Market Themes and the Shift in Focus
Over the past month, the EUR/USD’s moves have mostly been dictated by:
– Shifts in expectations regarding interest rates from both the Federal Reserve and the European Central Bank (ECB).
– Weaker European economic data, especially from Germany, raising concerns about the eurozone’s recovery.
– Persistently strong US job market figures and inflation data, reinforcing the narrative of a robust US economy.
However, with policy decisions from both the Fed and ECB now behind us, traders have turned their attention to upcoming US data releases. Key metrics from jobs, inflation, and consumer confidence sectors are expected to drive major FX market reactions in the near term.
## Key Technical Levels to Watch
Based on recent chart patterns and technical indicators, here are the main support and resistance levels for EUR/USD:
**Resistance:**
– 1.0700: A psychological level and minor resistance.
– 1.0750: A former support turned resistance level.
– 1.0800-1.0820: The top of the current range.
**Support:**
– 1.0660: A recent low and minor support zone.
– 1.0630: The next major floor.
– 1.0600: A key psychological level with historical significance.
## Technical Indicators
Several indicators reinforce a bearish outlook in the near term:
– **Relative Strength Index (RSI):** The RSI on the daily chart remains below the midline (50), signaling bearish momentum but not at oversold levels, implying room for further downside.
– **Moving Averages:**
– The 50-day Simple Moving Average (SMA) is tilting downward and above current price action.
– The 100-day and 200-day SMAs are also acting as dynamic resistance zones.
– **MACD (Moving Average Convergence Divergence):** The MACD histogram is in negative territory, showing weak bullish attempts and consistent downward pressure.
## Fundamental Picture
### Europe’s Struggles
The EU economy continues to battle sluggish growth, with Germany, the bloc’s economic locomotive, showing signs of contraction in crucial sectors such as manufacturing and construction. The European Central Bank has adopted a cautious tone despite sticky inflation, as policymakers stay mindful of the deteriorating economic backdrop.
Key concerns include:
– Weak consumer spending in major eurozone nations.
– High youth unemployment in southern Europe.
– German housing starts at multi-decade lows.
– Negative business sentiment surveys from PMIs (Purchasing Managers Index) across the eurozone.
Though the ECB has stated its willingness to hold rates steady for now, the risk of further deterioration in growth could pressure the monetary wing to consider easing sooner than the markets expect, especially if inflation shows signs of cooling further in upcoming
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