Daily Market Analysis and Forex News
EURUSD touches below 50-SMA amid German CPI and GDP data
- EURUSD touches below 50-period SMA
- Higher-than-expected German CPI at 2.3% YoY
- Negative German GDP at -0.1% QoQ
- Higher volatility could be expected with upcoming EU and US macro data
- Potential ECB and Fed rate cuts in September
EURUSD has briefly reached below 50-period SMA (~1.081061) despite higher-than-expected German CPI reading (2.3% YoY - actual vs. 2.2% YoY - expected).
However, recent GDP reading for the EU's largest economy has unexpectedly turned negative (-0.1% QoQ - actual vs 0.1% QoQ - expected).
With a number of important EU macro-economic data scheduled to be released this week, we may see a higher level of volatility in the major currency pair.
Key EURUSD centric events to keep an eye on:
- Wednesday, July 31: Euro-Zone Inflation; Fed Interest Rate Decision & press Conference
- Friday, August 2nd: US Non-Farm Payrolls and Unemployment Rate
At the time of writing, investors continue to price in a 25bps rate cut by the ECB in September. ECB President Lagarde has emphasized that policymakers remain "wide open" to the possibility of a cut.
As for the US, the markets are now pricing in a 91.4% chance of a September rate cut (source: CME FedWatch Tool).
From a technical perspective...
The EURUSD has moved lower and is now trading below both its 21- and 50-period SMAs, underscoring a medium-term bearish sentiment.
The Relative Strength Index is floating in neutral territory (<30 - oversold; >70 - overbought), indicating a potential balance between buying and selling pressure.
On the downside, the 50-period SMA may provide immediate support, while to the upside the 21-period SMA could be the key target/resistance level for the EURUSD bulls.
Want to practice some trading?
Read moreReady to trade with real money?
Open accountGateway to global opportunity
Join more than 1 million traders worldwide using Alpari as a gateway to a better life.