Yesterday’s trading sessions were dominated by the bulls (the buyers of EURUSD). During the American trading session, the market advanced up to 1.2767. At this point, the price level is the high of the current trading week. The following point was reached as the result of strong economic figures coming from Germany’s the Eurozone’s biggest and strongest economy.
Germany’s wholesale price index (WPI) improved from -0,2% up to 0,1% during the reporting period. The annual index dropped a bit from -0,6% down to -0,9%. Still, the actually figures came out a little bit stronger than expected by analysts (-1,0%).
However, Tuesday’s trading started from a decline. The US Dollar regain a bit of the lost ground against toe common currency during the first hours of the European trading session. The price dropped from the local weekly high of 1.2768 down to 1.2650.
Still, the Germany economic growth keep slowing down. Today’s economic report from Germany disappointed investors and traders, which was reflected in the current weakness of EURUSD. In particular, Germany’s institutional investors showed poor sentiment, which is confirmed by the ZEW index, which has already dropped by 10,5 points this month and is now equal to -3,6 points. The index has been dropping for 10 straight months. At the same time, the experts are sure that the ZEW index is going to see further lows in the near future, which only adds fuel to the fire, thereby exerting extra pressure on the common European currency on its way down against the US Dollar and other majors.
On top of that, the current geopolitical tension and risk around Ukraine and Russia keeps affecting the Eurozone, which has close economic ties with Russia (at least it used to have them before the sanctions imposed on Russia because of Ukraine).
Technical Picture by Masterforex-V Academy
According to Masterforex-V Academy, which is a true expert in financial markets, especially Forex trading, the common currency formed a bullish reaction yesterday - 1.2500-1.2790. At this point, the price is going in the opposite direction along the existing mid-term downtrend.
If to consider the near-term prospects of the currency pair, we should keep an eye on 1.2769 – the local high. If the price does manage to break and consolidate above it, we are likely to witness another rally up to a new local high. A break above last week’s high of 1.2790 will only confirm this bullish scenario.
Alternatively, a break below 1.2630 and 1.2610 will give way to further lows, thereby resuming the bearish bias. At the same time, the price may consolidate within the 1.2605-1.2790 range for some time.
