For the Euro, it’s another busy day ahead on the Eurozone economic calendar.
At the start of the European session, the Eurozone Economic Sentiment data for July will be of interest. Forecasts call for a weakening in economic sentiment, which could test the euro’s support.
Later in the day, the German inflation figures for July will have a more significant impact, with renewed inflationary pressures to add more uncertainty to the ECB’s decision in September.
Economists predict that Germany’s annual inflation rate will drop from 7.6% to 7.4%. A level below 7.4% would put the euro under pressure ahead of the expected data from the United States.
In the United States, the second quarter GDP figures will be the stat of the day. Weaker than expected numbers would likely put the euro under pressure.
At the time of writing, the Euro was up 0.16% at $1.02072.
In a mixed start, the euro fell to an early low of $1.01802 before rising to a high of $1.02344.
EUR/USD needs to hold above the $1.0169 pivot to target the first major resistance level (R1) at $1.0242 and resistance at $1.0250.
Economic indicators need to beat forecasts to support a break from the morning high of $1.02344.
An extended rally would likely see the EUR/USD pair test the second major resistance level (R2) at $1.0294 and resistance at $1.0300.
The third major resistance level (R3) is located at $1.0418.
A drop through the pivot would bring into play the first major support level (S1) at $1.0118.
Extended selling throughout the day could see EUR/USD test the second major support level (S2) at $1.0045.
The third major support level is located at $0.9921.
Looking at the EMAs and the 4 hour candlestick chart (below), this is a bearish signal.
At the time of writing, the EUR is hovering above the 100-day EMA, currently at $1.02058.
The 50-day EMA moved closer to the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, which were positive price signals.
A break of the 100-day EMA would support a run to R1 to target R2 and the 200-day EMA, currently at $1.02997.
However, a drop through the 50-day EMA would likely see EUR/USD drop through S1 to test S2.
The American session
It’s a busy day ahead for the US Dollar, with second quarter GDP figures and weekly jobless claims to attract market interest.
Expect any chatter from an FOMC member to influence. Ex-Fed Chair Yellen could move the dial, although her speech coincides with the GDP numbers. However, words of comfort in the event of a quarterly contraction in the US may fall on deaf ears.