. EUR/USD Nears 1.0800 Amid Mixed German IFO - 24 May 2023

EUR/USD Nears 1.0800 Amid Mixed German IFO

EUR/USD Nears 1.0800 Amid Mixed German IFO

24 May 2023

Despite a mixed German IFO, the EUR/USD moves closer to 1.0800

FUNDAMENTAL OVERVIEW

In the Wednesday European session, the EUR/USD gained momentum and moved closer to 1.0800. Even though the German IFO poll indicated a decline in business mood, the Euro found demand thanks to the rising Expectations Index.

After closing in the red on Tuesday, below 1.0800, the EUR/USD has been unable to gain any momentum in its rebound. In the medium term, the risk-averse market environment is expected to continue to weigh on the pair, and a four-hour finish below 1.0770 might pave the way for a long decline.

Early on Wednesday, data from Germany revealed a decline in company optimism in May, with the headline IFO company Climate Index slipping from 93.4 in April to 91.7 in May. Positively, the IFO Expectations Index, which represents firms’ expectations for the following six months, increased to 94.8 from 91.7, exceeding analysts’ expectations of 91.9.

Investors are continuing to be cautious in the middle of the week due to the stagnation in the US debt-limit talks. A weak start on Wall Street and a selloff in US stocks might strengthen the US Dollar and make EUR/USD remain under pressure. On the other hand, a rise in market sentiment should have the opposite effect on the pair.

EUR/USD TECHNICAL ANALYSIS DAILY CHART:

Technical Overview

EUR/USD is trading in the down channel.

EUR/USD is currently trading below all SMA.

RSI is in the selling zone which suggests bearishness and Stochastic is suggesting a downtrend.

EUR/USD resistance is at 1.07944 & its immediate support level is 1.07583

HOW TO TRADE EUR/USD

The EUR/USD is trading in a downtrend and downward channel. The price is currently trading at a crucial support level; if it falls through this level, further declines are expected. 

TRADE SUGGESTION- SELL AT 1.07583, TAKE PROFIT AT 1.07125, SL AT 1.07944.