EUR/USD faces stiff barricades around 1.0700 due to weak Eurozone economic outlook


  • EUR/USD has retreated after facing barricades around 1.0700 amid a recovery in the USD Index.
  • The German economy is going through a rough phase due to higher interest rates by the ECB.
  • ECB Lagarde is expected to raise interest rates further considering persistence in core inflation.

The EUR/USD pair has witnessed some selling interest after facing stiff barricades around 1.0700 in the early European session. The major currency pair is consistently defending the crucial support of 1.0670, therefore, a breakdown of the same would result in wider bearish ticks. The Euro has come under pressure as investors are anticipating a bleak economic outlook in Eurozone.

S&P500 futures generated mild gains in the Asian session. US equities registered a positive settlement on Tuesday as more dovish catalysts are adding to Federal Reserve’s (Fed) interest rate policy filters. The US Dollar Index (DXY) has rebounded to near 104.18. On a broader note, the USD Index is inside the woods amid a lack of economic events this week.

The demand for US government bonds has improved amid a mild decline in hawkish Fed bets. As per the CME FedWatch tool, more than 80% of the chances are in favor of a steady interest rate policy. This has led to a decline in the 10-year US Treasury yields to near 3.66%.

On the Eurozone front, the German economy is going through a rough phase due to higher interest rates by the European Central Bank (ECB). The German economy has already shown a recession after a consecutive contraction in quarterly Gross Domestic Product (GDP). Adding to that, German Factory orders are consistently declining, indicating weak demand.

Apart from that, Eurozone Retail Sales data released on Tuesday also failed to stand expectations. Monthly Retail Sales remained stagnant while the street was anticipating an expansion by 0.2%. Annual Retail Sales contracted by 2.6% vs. the expectations of -1.8%. In spite of the poor economic outlook, ECB President Christine Lagarde is highly likely to raise interest rates further considering persistence in core inflation.

EUR/USD

Overview
Today last price 1.0685
Today Daily Change -0.0008
Today Daily Change % -0.07
Today daily open 1.0693
 
Trends
Daily SMA20 1.0784
Daily SMA50 1.0892
Daily SMA100 1.0811
Daily SMA200 1.0509
 
Levels
Previous Daily High 1.0733
Previous Daily Low 1.0667
Previous Weekly High 1.0779
Previous Weekly Low 1.0635
Previous Monthly High 1.1092
Previous Monthly Low 1.0635
Daily Fibonacci 38.2% 1.0692
Daily Fibonacci 61.8% 1.0708
Daily Pivot Point S1 1.0662
Daily Pivot Point S2 1.0632
Daily Pivot Point S3 1.0596
Daily Pivot Point R1 1.0728
Daily Pivot Point R2 1.0763
Daily Pivot Point R3 1.0794

 

 

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