EUR/USD Remains Pressured Near March Low, Bearish Breakout Possible

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EUR/USD Current Price: 1.1720

• The focus shifts to the US Consumer Price Index, foreseen at 5.3% YoY.
• The German ZEW survey showed that Economic Sentiment fell to 40.4 in August.
• EUR/USD remains pressured near March low, bearish breakout possible.

The EUR/USD pair fell to 1.1708, approaching March monthly low as the American currency retained its strength while the EUR suffered from softer-than-expected local data. The pair bounced modestly from the level to settle around 1.1720, as risk appetite returned during the US afternoon, following news that the US Senate passed a $1.2 trillion infrastructure bill, which has now moved to the House.

Germany published the August ZEW Survey, which showed that Economic Sentiment in the country sharply contracted to 40.4 vs the expected 56.7. The assessment of the current situation printed at 29.3, below the 30 forecast. For the EU, Economic Sentiment plunged to 42.7 from 61.2, well below the 72 expected. On the other hand, the US unveiled the NFIB Business Optimism Index, which printed at 99.7 in July, below the previous 102.5. The country also released the preliminary estimate of Q2 Nonfarm Productivity, which resulted at 2.3%, and Unit Labor Cost up by 1%, both missing the market’s expectations.

On  Wednesday, Germany and the US will publish the final readings of their July inflation figures. The focus will be on the latter, as the annual reading is expected to be confirmed at 5.3%.

EUR/USD short-term technical outlook

The EUR/USD pair holds near the 1.1703 level, March monthly low. The risk is skewed to the downside as the 4-hour chart shows that it keeps developing well below a firmly bearish 20 SMA, which is accelerating its slide below the longer ones. Meanwhile, technical indicators consolidate within oversold readings, giving some signs of downside exhaustion. Nevertheless, there are no other hints of a possible corrective advance.

Support levels: 1.1705 1.1660 1.1620

Resistance levels: 1.1750 1.1790 1.1830

Image by Harry Strauss from Pixabay

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.