Dear ,
As requested, let’s look at EURUSD and the recent events that happened in the previous trading session.
EURUSD Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | -0.26% | -28.3 Pips |  |
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| Week to-date | -0.62% | -67.6 Pips | |
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| October | -2.5% | -278.8 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
The United States experienced a significant drop in manufacturing activity as reflected by the New York Empire State Manufacturing Index, which decreased to -11.9 points in October from 11.5 in September, according to the New York Fed. This negative shift indicates a marked slowdown in economic momentum within the region, suggesting potential challenges for the manufacturing sector in the near future.
In contrast, the Euro Area shows signs of positive economic sentiment. The ZEW Survey reported that economic sentiment rose sharply to 20.1 points in October, compared to 9.3 points in the previous month. This improvement reflects growing confidence in the Eurozone’s economic recovery. Furthermore, Eurostat reported a noteworthy increase in Euro Area industrial production with a 1.8% rise in August, reversing a prior decline of -0.5%. These figures collectively indicate an upward trend in economic activity within the Eurozone, suggesting improved production outputs and heightened investor sentiment.
Germany’s economic outlook remains mixed. The ZEW Indicator of Economic Sentiment for October increased to 13.1 points from 3.6 points in September, indicating a more optimistic view among economic analysts about the German economy. However, this optimism is tempered by the ZEW Survey for the Economic Situation, which fell to -86.9 points in October from -84.5 in September, highlighting ongoing concerns about the broader economic conditions in Germany. Despite increased sentiment, the economic situation still paints a bleak picture when considering these figures.
These economic developments have significant implications on the EURUSD currency pair. The U.S.’s disappointing manufacturing data and the positive economic sentiment in the Euro Area could increase demand for the Euro against the U.S. dollar, potentially boosting the EURUSD. However, Germany’s mixed economic signals could mitigate some gains, thus keeping the currency pair relatively subdued. The slight drop of -0.26% to 1.08578 indicates that traders are still cautious, balancing between the positive Eurozone data and the weaker U.S. manufacturing figures. Upcoming key events, such as the European Central Bank’s (ECB) interest rate decision and U.S. Monthly Retail Trade figures, will heavily influence future movements of the EURUSD as investors look for clearer indications on economic policy direction and consumer spending trends.
What can we expect from EURUSD today?
EURUSD on Wednesday dropped -0.26% to 1.08578. 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 Wednesday trading session.
Looking ahead for the day, immediate support level is at S1 1.08401 with break below could see further selling pressure towards S2 at 1.08223. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.09014 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.08530 would indicate selling pressure.
For the week to-date, take note that EURUSD is bearish as the pair posted lower by -0.62%.
Key levels to watch out:
| R3 | 1.09369 |
| R2 | 1.09191 |
| R1 | 1.08885 |
| Daily Pivot | 1.08707 |
| S1 | 1.08401 |
| S2 | 1.08223 |
| S3 | 1.07917 |
