EUR/USD Extends Gains Towards 1.1850 After German Data

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The EUR/USD currency pair on Thursday extended the current mid-week gains towards 1.1850 after bouncing off key support at 1.1700 on Wednesday. This comes hot on the heels of Thursday’s German data and ahead of the EU GDP and US jobless claims data.

The currency pair has now surged to the overbought levels of the 14-hour RSI in the 60-min chart. It appears set to complete the 1,2,3,4,5, impulse wave in the coming days. The 1.1700 and 1.1900 continue to act as key support and resistance zones, respectively.

EUR/USD Fundamentals Overview

From a fundamental perspective, the EUR/USD currency pair is trading at the back of a relatively busy period in the US market. The EU also had a fair share of activity during the week. On Tuesday, the ZEW survey economic sentiment for August beat the expectation of 59.9 with 64. On Wednesday, industrial production for June missed the expected (MoM) change of 10% with a change of 9.1%. 

Traders will be looking forward to Friday’s GDP. In Germany, the ZEW current situation index missed -68.8 with -81.3 while ZEW survey economic sentiment beat 58 with 71.5. On Friday’ Germany’s harmonized index of consumer prices for July matched the (YoY) expectation of 0.0%. The CPI was also in line with -0.5% (MoM) and -0.1% (YoY).

In the US, the PPI ex-food and energy for July beat the expected (YoY) change of 0.0% with 0.3%. On Wednesday, the US CPI for July also outperformed the (YoY) and (Mom) expectations of 0.8% and 0.3%, respectively with 1% and 0.6%. On the other hand, CPI ex-food and energy beat 0.2% (MoM) and 1.1% (YoY) with 0.6% and 1.6%, respectively.

EUR/USD Technical Analysis (the 60-min Chart)

Technically, the EUR/USD currency pair appears to be trading within a highly volatile sideways channel. The pair enjoys strong support around 1.1700 but also faces strong resistance at 1.1900. It has surged to overbought levels of the 14-hour RSI after the latest rebound.

The bulls will be looking to extend the current gains towards the key resistance level at around 1.1900 or slightly lower at 1.1875. On the other hand, the bears will target pullback profits at 1.1823 or lower at 1.1797.

EUR/USD Technical Analysis (the Daily Chart)

In the daily chart, the EUR/USD currency pair appears to have recently pulled back off 2-year highs of about 1.1920. The pair has since attempted to bounce back off the 1.1700. However, it still faces strong resistance beyond the 1.1900 level.

The bears will be looking to extend the current pullback towards 1.1764 or lower to 1.1674. On the other hand, the bulls will look to retain control by targeting long-term profits at around 1.1917 or higher at 1.2004.

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