Dear ,
As requested, let’s look at EURUSD and the recent events that happened in the previous trading session.
EURUSD Analysis
| Performance after Monday | |||||
| Period | Pct | Chg | Momentum | ||
| Monday | -0.47% | -51.6 Pips |  |
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| Week to-date | -0.49% | -52.8 Pips | |
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| October | -2.88% | -321 Pips |  |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In Germany, the Producer Prices Index (PPI) saw a notable downturn. Over a twelve-month timeframe, the index declined to -1.4% in September, following a smaller decrease of -0.8% in August. This marks a significant year-on-year reduction in producer prices, suggesting that the cost pressures faced by producers in Germany are easing further. Additionally, on a month-to-month basis, the PPI also fell to -0.5% in September, compared to an increase of 0.2% in the previous month. This decrement in the short-term PPI complements the broader annual decline, highlighting a continued trend of decreasing wholesale price levels in the German market. The data from the Federal Statistical Office, Destatis, reflects changing economic dynamics, potentially as a response to lower demand pressures or adjustments in production costs.
The reported decline in Germany’s Producer Prices Index has potential implications for the EURUSD exchange rate. A decrease in producer prices typically signals diminishing inflationary pressures within an economy, possibly leading to a softer monetary stance by the European Central Bank (ECB). With inflationary concerns mitigated, the ECB might maintain lower interest rates or delay any tightening of monetary policy, which can affect foreign exchange markets by making the euro less attractive compared to higher-yielding currencies. On Monday, EURUSD already reflected some of these influences with a drop of -0.47%, settling at 1.08156. The continued decline in Germany’s PPI could exacerbate bearish sentiment for the euro, further impacting the EURUSD exchange rate as investors adjust expectations surrounding European monetary policy and inflation dynamics.
What can we expect from EURUSD today?
EURUSD on Monday dropped -0.47% to 1.08156. Price is below 9-Day EMA while Stochastic is falling in oversold zone.
Updated daily direction for EURUSD looks bearish as the pair posted lower in Monday trading session.
Looking ahead for the day, immediate support level is at S1 1.07946 with break below could see further selling pressure towards S2 at 1.07736. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.08690 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.08108 would indicate selling pressure.
For the week to-date, take note that EURUSD is bearish as the pair posted lower by -0.49%.
Key levels to watch out:
| R3 | 1.0911 |
| R2 | 1.089 |
| R1 | 1.08528 |
| Daily Pivot | 1.08318 |
| S1 | 1.07946 |
| S2 | 1.07736 |
| S3 | 1.07364 |
