As the EUR/USD pair struggles to maintain its ground above 1.0800, recent data from Germany and the Eurozone has added to the bearish case. German GDP fell short of expectations in Q2, while inflation ticked higher in July. This, combined with upcoming first-tier events in the financial markets, has investors on edge.
The Bank of Japan will announce its monetary policy decision, Australia will release Q2 inflation figures, and the Federal Reserve will also make a policy announcement. The US will publish employment-related data ahead of the Nonfarm Payrolls report, and the Bank of England will unveil its decision later in the week.
German GDP contracted by 0.1% in Q2, below the 0.1% expected, while Eurozone GDP came in at 0.3%, beating expectations. Consumer Confidence in the EU remained steady, but Germany saw an increase in consumer prices in July. The US session will bring the CB Consumer Confidence report and JOLTS Job Openings data.
Technical Outlook for EUR/USD
On the daily chart, the EUR/USD pair shows increased bearish momentum, with the 20 SMA acting as resistance. The 200 SMA provides support around 1.0800, while technical indicators point to further downside. The 4-hour chart confirms the bearish outlook, with the 100 and 200 SMAs indicating a potential decline. Support levels are at 1.0800, 1.0760, and 1.0720, while resistance levels are at 1.0835, 1.0885, and 1.0920.
Overall, the EUR/USD pair faces strong selling pressure as economic data disappoints and investors await key events in the financial markets. Traders should be cautious of a potential downward trend in the near term.