Piece written by Alexa Smith, Trive Financial Market Analyst 

After a quiet week in Europe, the EURUSD currency pair tumbled due to stronger-than-expected US PPI growth which boosted the prospect of interest rates remaining higher for longer. The US PPI MoM grew by 0.3% in July after remaining unchanged in June, while Michigan Consumer Sentiment fell less than expected from 71.6 to 71.2, cushioning ahead of the forecasted figure of 71. 

However, a burst of macroeconomic data in Europe is expected this week which could lay out a different path for the currency pair. ZEW Economic Sentiment is expected tomorrow, while GDP growth and Industrial Production data are scheduled for Wednesday. With a decline in both year-on-year GDP growth and Industrial Production expected, a boost in quarter-on-quarter GDP growth may not be enough to bolster the Euro against a robust US Dollar. Meanwhile, year-on-year inflation in Germany cooled last week from 6.4% to 6.2%, falling in line with expectations, which could pave the way for a drop in Euro Area inflation at the end of this week.  

Técnicos 

A downward trend continues to threaten the EURUSD currency pair after another failed breakout attempt at the 1.10423 resistance level encouraged a leg down towards the 1.09129 support. Since the currency pair edged below the 50-day moving average, downside pressure may push the price action towards the 1.09129 support, where a breakout towards the 1.08383 major support may occur.  

However, a green candlestick may be a martyr for an upward trend if a leg up towards the 1.09928 resistance at the 23.60% Fibonacci level is sustained. If the price action is encouraged to break through this resistance level, a breakout from the 1.10423 resistance may mark a pivot point for a reversal.  

Resumen 

The EURUSD currency pair is still being threatened by a strong Greenback on the backdrop of rising PPI data. If macroeconomic data in Europe fails to soften, the currency pair may be encouraged to retest the 1.08383 major support. However, a green candlestick may encourage the curve to flatten and edge up towards the 1.10423 resistance. 

Sources: TradingView, Reuters 

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