The EUR/USD currency pair pulled back on Tuesday afternoon to trim the gains made early on as it ended the session at around 1.1173. The pair had made short-term gains in the morning session but faced retracted after facing strong resistance around 1.1220.
The currency pair has been trading on a sideways movement since August 6, and this trend appears set to continue to the end of the week. This will create multiple bullish and bearish opportunities for traders to target.
EUR/USD Fundamentals Overview
From a fundamental perspective, the EUR/USD currency pair major economic events in the US and ahead of a series of economic data expected to come out on Wednesday from the EU economic block.
On Tuesday, the US Consumer Price Index beat expectations of 1.7% with 1.8% growth but the Redbook INdex slowed after falling by -2.0% on a (MoM) basis from the previous period’s growth of 1.1%. The (YoY) figure also slowed with 4.4% growth compared to a growth of 5.1% in the previous period.
On Wednesday, traders will be looking forward to the preliminary EU GDP, the unemployment change and Industrial Production scheduled to come out at around 9:00 AM GMT.
EUR/USD Technical Analysis (the 60-min Chart)
From a technical viewpoint, the EUR/USD currency pair continues to trade within a sideways channel, which indicates a short-term consolidation pattern. The pair is currently pegged below both the 100-hour and the 200-hour MA lines, which indicates that the next breakout could be bearish.
The bull will be targeting profits at around 1.1183, 1.1195 and 1.1220. On the other hand, the bears will look to pounce on the pair at around 1.1166.
EUR/USD Technical Analysis (the Daily Chart)
In the daily chart, the EUR/USD currency pair appears to have recently made a bearish reversal pattern after a short-bullish run that ended in late June. The bear is now trading within a bearish wedge, which indicates that in the intermediate time frame, the bears have control.
Therefore, they will target profits at around 1.1124 or lower at 1.1068 while the bulls will be looking at 1.1230 and 1.1283 should the pair continue to extend gains.
In summary, the EUR/USD currency pair appears to be consolidating in a sideways channel in the short-term but the bears have control in the intermediate and long-term time frames.