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Jul 29 - 08:55 AM

EUR/USD - COMMENT-EUR/USD Reaction To European Data Is Very Telling

By Martin Miller  —  Jul 29 - 06:40 AM

EUR/USD's fall in response to the latest euro zone data shows the currency pair's downside remains vulnerable.
Also the daily chart continues to point to a bearish extension below the recent multi-year 0.9952 low in the days ahead.

Euro zone economic growth accelerated quarter-on-quarter in the second quarter, defying expectations of a slowdown. nL8N2ZA3CX.
Meanwhile euro zone inflation rose to another record high in July and its peak could still be months away, keeping pressure on the European Central Bank to opt for another big interest rate increase in September. nL1N2ZA0KN.

However, FX traders seem to have put greater weight on the slowdown in Germany.
The German economy, the largest in Europe, stagnated in the second quarter. nL8N2ZA30X.

The technical outlook is continuing to have a negative effect on EUR/USD.
Last week spot failed above the 1.0271 Fibo, a 38.2% retrace of the 1.0787 to 0.9952 (EBS) drop, setting up a "bull trap".
A bull trap is set when a market breaks above a technical level but then reverses and is usually a bearish sign.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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