EUR/USD Current price: 1.1625
- The German ZEW Survey showed Economic Sentiment contracted in August.
- The United States Consumer Price Index rose by 2.7% on a yearly basis in July.
- EUR/USD struggles for direction, but holds above the 1.1600 mark.
The EUR/USD pair traded in a tight range just above the 1.1600 mark throughout the first half of the day, with the US Dollar (USD) retaining its Monday gains but struggling to advance ahead of first-tier data releases.
No surprise, the United States (US) and China announced an extension to their 90-day truce on massive reciprocal tariffs, which was meant to end today. Washington and Beijing have been engaged in negotiations, which so far have produced no result. The US currently levies all Chinese imports with 30%, while China charges a 10% tariff on American imports. Back in April, tit-for-tat tariffs’ threats reached 145% and 125% respectively, but representatives from both nations began a series of talks that are still ongoing, hence the extensions.
Other than that, market players pretty much ignored European data. Germany published the August ZEW Survey on Economic Sentiment, which fell by more than anticipated in the month. The German index printed at 34.7, down from the previous 52.7 and below the 40 anticipated. For the Eurozone, the index dropped from 36.1 in July to 25.1. Finally, the assessment of the current situation in Germany was down to -68.6 after posting -59.5 in the previous month.
Markets found some life following the release of the US Consumer Price Index (CPI). Annual inflation, as measured by the Bureau of Labor Statistics (BLS) rose at an annualized pace of % in July, of 2.7%, lower than the 2.8% market’s forecast. The core annual reading, however, increased by 3.1%, higher than the previous 2.9% and the 3% anticipated. On a monthly basis, the CPI rose by 0.2%, while the core monthly reading resulted at 0.3%, matching expectations.
The macroeconomic calendar has nothing else to offer for the rest of the day, although a couple of Federal Reserve (Fed) speakers will be on the wires during the American afternoon.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows it holds on to modest gains, but within Monday’s range. At the same time, the pair is battling a flat 20 Simple Moving Average (SMA), while the 100 and 200 SMAs regain their upward strength far below the shorter one. Technical indicators, in the meantime, remain directionless between neutral and bearish territory. All in all, the risk of a steeper advance seems limited as long as the pair remains below 1.1700.
The near-term picture is neutral. In the 4-hour chart, EUR/USD is trapped between directionless moving averages, with the 200 SMA providing dynamic resistance at around 1.1665. Finally, technical indicators lack directional strength within neutral levels, failing to provide clear directional clues. The weekly low at around 1.1590 acts as support, with a break below it opening the door for another leg south.
Support levels: 1.1590 1.1550 1.1510
Resistance levels: 1.1665 1.1705 1.1740
