The Euro is trading flat against the U.S. Dollar early Wednesday as investors continue to react to the grim Euro Zone economic data released on Tuesday. Additionally, investors remain jittery that new COVID-19 hot spots across the world might jeopardize the swift recovery from the pandemic they are hoping for.
At 02:21 GMT, the EUR/USD is trading 1.1238, up 0.0004 or +0.04%.
Strong U.S. economic data also put a cap on the Euro’s gains. The S&P/CS Composite-20 HPI rose 4.0%, beating the estimate and previous month. The Conference Board’s Consumer Confidence report came in at 98.1, trouncing the 91.6 estimate and last month’s downwardly revised 85.9. Chicago PMI failed to impress with a 36.6 reading.
The common currency lost further ground against the dollar in morning trading after underlying price pressures dropped again in the Euro Zone, underscoring fears that consumer price growth will remain anemic for years.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 1.1422 will change the main trend to up. A move through 1.1168 will signal a resumption of the downtrend.
The minor trend is also down. The minor trend will change to up on a trade through 1.1288. This will also shift momentum to the upside. Taking out the new main bottom at 1.1190 will indicate increasing selling pressure.
The major support is the retracement zone at 1.1167 to 1.1066. This zone is also controlling the longer-term direction of the EUR/USD.
The minor range is 1.1168 to 1.1349. Its 50% level or pivot at 1.1259 is resistance.
The short-term range is 1.1422 to 1.1168. Its 50% level or pivot at 1.1295 is another resistance level.
Daily Swing Chart Technical Forecast
Tuesday’s price action suggests the direction of the EUR/USD on Wednesday is likely to be determined by trader reaction to 1.1259.
A sustained move under 1.1259 will indicate the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into a cluster of levels at 1.1190, 1.1168 and 1.1167.
We could see a technical bounce on the first test of 1.1168 to 1.1167. If the latter fails then look for a possible acceleration into 1.1066.
Overcoming 1.1259 will signal the presence of buyers. This could trigger a move into 1.1288 to 1.1295. Crossing to the strong side of 1.1295 could trigger and acceleration into 1.1349 and 1.1353.
Volume may be low ahead of the release of the U.S. Non-Farm Payrolls report on Thursday and Friday’s U.S. bank holiday so be careful buying strength and selling weakness.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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