Dear ,
As requested, let’s look at EURUSD and the recent events that happened in the previous trading session.
EURUSD Analysis
| Performance after Tuesday | |||||
| Period | Pct | Chg | Momentum | ||
| Tuesday | -0.19% | -20.9 Pips |  |
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| Week to-date | -0.36% | -38.8 Pips | |
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| October | -2.24% | -250 Pips |  |
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Upcoming key events (London Time)
Thu 01:15 PM EUR ECB Interest Rate on main refinancing operations (MRO)
Thu 01:30 PM USD Monthly Retail Trade (1-mth)
What happened lately
In the United States, the New York Empire State Manufacturing Index experienced a significant decrease in October, falling to -11.9 points from 11.5 points in September. This data, sourced from the New York Fed, suggests a notable downturn in manufacturing activity within the region, indicating potential economic challenges ahead for the U.S. manufacturing sector.
Moving to the Euro Area, the ZEW Survey reported a rise in Economic Sentiment for October, increasing to 20.1 points from 9.3 points in September, as per ZEW reports. This improvement demonstrates growing optimism regarding economic conditions within the Euro Area, potentially indicative of greater economic stability. Additionally, the Euro Area Industrial Production, according to Eurostat, saw a positive shift in August with an increase of 1.8% from a previously revised -0.5% in July, further highlighting a recovery in industrial activities.
Regarding Germany, the ZEW Indicator of Economic Sentiment improved to 13.1 points in October, up from 3.6 points in September, as indicated by ZEW data. Despite this upward movement, the ZEW Survey for Germany’s Economic Situation showed a decline, with the index dropping to -86.9 points in October from -84.5 points in September. This reveals an ongoing overall pessimism about the current economic conditions despite expectations of a slightly better future outlook in Germany.
Regarding the impact on EURUSD, the currency pair saw a decline of -0.19% to 1.08866. The mix of data with U.S. manufacturing decline juxtaposed with improved European sentiment and production initially suggests the Euro might strengthen. However, the ongoing pessimism about Germany’s current economic situation and potential concerns about future uncertainties, combined with the anticipated economic data releases, likely contributed to this downward pressure on the currency pair. Markets are likely bracing for upcoming European Central Bank announcements on interest rates as well as U.S. retail trade data, which will provide more cues on economic direction and potentially influence further EURUSD movements.
What can we expect from EURUSD today?
EURUSD on Tuesday dropped -0.19% to 1.08866. 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 Tuesday trading session.
Looking ahead for the day, immediate support level is at S1 1.08732 with break below could see further selling pressure towards S2 at 1.08599. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.09167 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.08816 would indicate selling pressure.
For the week to-date, take note that EURUSD is bearish as the pair posted lower by -0.36%.
Key levels to watch out:
| R3 | 1.09434 |
| R2 | 1.09301 |
| R1 | 1.09083 |
| Daily Pivot | 1.0895 |
| S1 | 1.08732 |
| S2 | 1.08599 |
| S3 | 1.08381 |
