With the start of this week’s trading, the price of the EUR/USD currency pair completed the downward path, closing last week’s trading around the support level 1.0232. The EUR/USD pair was subjected to selling operations for the third consecutive day, starting from the resistance level 1.0368.
The euro was affected by the June industrial production in the EU exceeding expectations (MoM) at 0.2% with 0.7%. The equivalent (YoY) outperformed 0.8% by 2.4%. In Germany, the HS CPI for July matched expectations (on an annual basis) at 8.5%. The EQ (MoM) also came in line with expectations of 0.8%.
From the United States, the preliminary US consumer confidence index from Michigan for August exceeded expectations at 52.5 with a reading of 55.1. The import and export indicators for July left expectations (monthly) at -1% and -1.1% respectively with readings of -1.4% and -3.3%. Earlier last week, initial US jobless claims last week beat the expected claims count of 263K with a total drop of 262K. On the other hand, the previous week’s continuing claims went against the 1.407 million expectation with the number of claims rising by 1.428 million.
In the near term and according to the hourly chart, it appears that the EUR/USD is trading within a descending channel formation. This indicates a significant short-term bearish momentum in market sentiment. Therefore, the bulls are looking to extend Friday’s rebound towards 1.0313 or higher to 1.0359. On the other hand, the bears will look to take profits around 1.0213 or lower at 1.0168.
In the long term and according to the performance on the daily chart, it appears that the EUR/USD is trading within a gently descending channel formation. This indicates a slight long-term bearish momentum in the market sentiment. Therefore, the bears will target long-term profits at around 0.10003 or lower at 0.9707. On the other hand, the bulls will look to pounce on profits at around 1.0537 or higher at 1.0776.
As I mentioned before, the divergence in economic performance and the future of monetary policy tightening by central banks between the eurozone and the United States of America will continue to hamper any gains for the EUR/USD currency pair.
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