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 | -0.36% | -39 Pips |  |
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| Week to-date | -2.05% | -229.4 Pips | |
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| October | -1.76% | -196.2 Pips |  |
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Upcoming key events (London Time)
Thu 01:30 PM USD CPI Inflation Rate (12-mth)
Fri 01:30 PM USD Producer Price Index (12-mth)
What happened lately
In recent economic releases from Germany, the seasonally adjusted trade balance demonstrated a robust increase, reaching €22.5 billion in August, compared to €16.8 billion in July, as reported by Destatis. This significant improvement in the trade balance suggests stronger export performance or a decline in imports, which fundamentally strengthens the German economy by contributing positively to GDP. Additionally, Germany’s unadjusted industrial production, adjusted for working days, exhibited a recovery with a year-on-year improvement, moving to -2.7% in August from -5.3% in July, according to the Federal Statistical Office (Destatis). This indicates a revival in industrial activities and a potential rebound in industrial sector performance. Similarly, the seasonally adjusted industrial production also showed positive trends, increasing to 2.9% in August from a decline of -2.4% in July. Overall, these data reflect a resilient recovery in Germany’s industrial and trade sectors, indicating underlying economic strength.
Against this backdrop, the EUR/USD currency pair experienced a marginal decline of 0.36% on Wednesday, settling at 1.09404. The positive economic indicators coming out of Germany should ideally support the euro, potentially appreciating against the US dollar due to enhanced investor confidence in Europe’s largest economy. However, upcoming high-impact economic events in the United States, including the CPI Inflation Rate and the Producer Price Index, could sway market dynamics. If these US data releases indicate stronger-than-expected economic activity or rising inflation, the Federal Reserve might adopt a more hawkish monetary stance, strengthening the USD further. Consequently, while the German economic recovery presents upward potential for the euro, shifts in US economic indicators and corresponding policy responses could dominate the EUR/USD movement in the short term.
What can we expect from EURUSD today?
EURUSD on Wednesday dropped -0.36% to 1.09404. 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 1.09246 with break below could see further selling pressure towards S2 at 1.09089. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.09787 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.09359 would indicate selling pressure.
For the week to-date, take note that EURUSD is bearish as the pair posted lower by -2.05%.
Key levels to watch out:
| R3 | 1.10102 |
| R2 | 1.09945 |
| R1 | 1.09674 |
| Daily Pivot | 1.09517 |
| S1 | 1.09246 |
| S2 | 1.09089 |
| S3 | 1.08818 |
