The EUR/USD currency pair continues to trade in a consolidative triangle formation above 1.1030 after a positive German Trade balance data on Monday. The recent consolidative pattern started forming following a short-term bull-run that came after a major plunge in the pair in the previous two weeks.
The EUR/USD currency pair is now trading just above the 100-hour MA line while the 200-hour counterpart is a few paces below. This indicates that the pair will continue to enjoy strong support around the 1.1030 level going into Wednesday.
EUR/USD Fundamentals Overview
The EUR/USD currency pair is trading at the back of a major week in the US economic front following last week’s non-farm payrolls data. Last Friday, the US non-farm payrolls missed expectations of 158k jobs with 130k jobs and this put pressure on the greenback heading into this week. This explains why the Euro has gained ground against the US Dollar in the last few days.
On Monday, the German Trade balance beat expectations of EUR 17.5 billion with EUR 20.2 billion. Exports also impressed with 0.7% change versus an expectation of -0.5%, but imports missed the forecasted change of -0.3% with -1.5% for the month of July. The EU economic block Sentix Investor Confidence beat with -11.1 versus a predicted figure of -14.0.
And on Tuesday, French and Italian Industrial output missed expectations thereby limiting the upside potential for the EUR/USD despite the US JOLTS jobs Openings missing expectations of 7.311M with 7.217M.
EUR/USD Technical Analysis (the 60-min Chart)
Technically, the EUR/USD currency pair appears to be trading in a consolidative triangle formation following the period of mixed results from both the US and the EU’s top economic powerhouses.
The pair is pegged centrally in the Relative Strength Index indicator, which suggests that the current consolidative movement could continue through the end of this week. And as demonstrated using the Fibonacci Retracements in the 60-min chart above, the bulls will be targeting profits at around 61.80% Fib level at 1.1070 while the bears will target the 38.20% Fib level at 1.1017.
EUR/USD Technical Analysis (the Daily Chart)
In the daily chart, the EUR/USD currency pair appears to be trading under intense bearish pressure in a downward trending channel that stretches back to July last year. The pair is pegged well below the 100-day and the 200-day moving average lines despite its recent rebound.
This suggests that the bulls could still target long-term profits just below the trendline resistance at 1.1150 while the bears will target opportunities just above the trendline support at around 1.0915.
In summary, the EUR/USD currency pair appears to be trading within a short-term consolidative triangle formation but in the long-term, the bears still hold considerable control.