Eurozone Data Challenges EUR/USD at 1.0700
06 Jun 2023
Due to mixed Eurozone statistics, the EUR/USD is battling 1.0700
FUNDAMENTAL OVERVIEW
After April’s mixed Eurozone Retail Sales data, selling pressure on the EUR/USD has increased again as it struggles against 1.0700. The cautious market environment, weak German factory orders, and a wide US Dollar recovery continue to put pressure on the pair.
Early on Tuesday, the EUR/USD pair continued to trade in a range after ending the first trading day of the week essentially unchanged. Between 1.0680 and 1.0750, the pair appears to have established a horizontal trading range. The pair may go in a new direction if they make a bold move out of that channel.
On Monday, the US Dollar weakened in the latter part of the day, allowing EUR/USD to launch a comeback. The ISM Services PMI fell from 51.9 to 50.3 in May, signaling a slowdown in the economic activity of the service sector. In addition, the survey’s core findings demonstrated that input inflation slowed down more quickly than anticipated as payrolls shrank, with the Employment Index falling to 49.2 from 50.8.
Inflationary pressures in the Euro area continue to be significant, according to remarks made by Christine Lagarde, president of the European Central Bank (ECB), to the European Parliament on Monday. Similar to this, ECB policymaker Klaas Knot stated that the bank will continue to tighten its monetary policy until it sees inflation return to its target level of 2%. Hawkish ECB comments may help the euro continue to prevent short-term losses.
There won’t be any significant US data releases in the second half of the day. US stock index futures trade flat for the day, with no indication of how investors feel about risk. As a result, it might be difficult for EUR/USD to exit its consolidation channel.
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 1.07294 & its immediate support level is 1.06910
HOW TO TRADE EUR/USD
After increasing, the EUR/USD reversed direction and began trading in a downward trend. Price is currently moving downward and is trading at a crucial support level; if this level is broken, more downside is to be expected.