The EUR/USD currency pair pulled back late on Tuesday to trade at just above the 1.0950 level after the early morning rally had pushed it towards the key level at 1.1000. The currency pair appears to be facing strong resistance just below the 1.1000 level, which ultimately brought an end to the most recent rally.
The EUR/USD currency pair bounced off new multi-year lows of about 1.0880 after an extended period of declines that dates back to the middle of last month.
EUR/USD Fundamentals Overview
From a fundamental perspective, the EUR/USD currency pair is trading at the back of a major miss in the US inflation data. On Tuesday, the US Producer Price Index change for September came in at -0.3% (MoM) and 1.4% (YoY), missing the expectations of 0.1% and 1.8%.
The NFIB Business Optimism Index also missed the consensus estimate of 104.1 with 101.8 while the PPI ex-Food and energy were also below the mark with -0.3% (MoM) and 2% (YoY) change versus 0.2% and 2.3% respectively.
On the other hand, the EU’s Sentix Investor Confidence Index missed with -16.8 versus a predicted figure of -13 while German Factory Orders beat with -0.6% (MoM) change and missed with -6.7% (YoY) versus -1.5% and -4.6% respectively.
In addition, trade tensions have continued to balloon over the last few days and this is also weighing on the greenback, which explains the EUR’s attempt to recover on Wednesday.
EUR/USD Technical Analysis (the 60-min Chart)
Technically, the EUR/USD currency pair appears to be trading in a weakening upward trend, that’s forming a curve. This could trigger the next bearish trend reversal especially if the greenback can recover from recent weaknesses.
Therefore, the bears will be targeting short-term profits at around 1.0940 or lower at 1.0910. On the other hand, the bulls will be looking to pounce for profits at around 1.1000 or higher at 1.1025.
EUR/USD Technical Analysis (the Daily Chart)
In the daily chart, the EUR/USD currency pair continues to trade within a bearish channel, which indicates a long-term bearish bias in the market sentiment. The pair has recently touched the trendline resistance at around 1.0970 and this triggered Tuesday’s pullback towards 1.0955.
Therefore, the bears will be targeting long-term profits at around 1.0880 or lower at 1.0800. On the other hand, the bulls will hope that the pair can breach the current trendline resistance and head towards 1.1030 or higher at 1.1096.
In summary, the EUR/USD currency pair appears to be experiencing a short-term bull-run but in the long-term, the bears retain control.