The EUR / USD pair ended yesterday’s trading with a decline of 0.45%, amid a stronger dollar across the entire spectrum of the market and the publication of another batch of weak economic data from Germany. According to the ZEW report presented yesterday, the index of economic sentiment in Germany fell to its lowest level in the current year, and the index of economic conditions updated its lows since August 2010!
The United States responded with a fairly good report on retail sales, which indicates an increase in consumer spending, thereby strengthening the position of the dollar in the foreign exchange market. A series of good economic reports from the United States forced investors to reconsider their views on the future policy of the Fed. The market is still waiting for the Fed to reduce rates, but, obviously, it will be less significant than previously expected. Experts are now talking about one possible reduction of 0.25% in 2019.
Today, the focus of investors will be data on the consumer price index in the EU, which may have a certain impact on the outcome of the ECB meeting (July 25). Previously published data for individual EU countries were better than market expectations, so today we can also expect a stronger report, which could be a good signal for the development of the correction for the EUR / USD pair. The US dollar can be affected by data on the construction sector, as well as the Fed's Beige Book.
On the chart while dominated by bearish signals. Sellers are gradually increasing pressure on the level of 1.1200, which significantly increases the likelihood of a breakdown of this mark and the further development of the downward movement to 1.1130.
· Resistance levels: 1.1225, 1.1265, 1.1300.
· Support levels: 1.1200, 1.1170, 1.1130.
The main scenario - a correction to the area of 1.1225 and a decline to 1.1270.
Alternative scenario - breakdown of local resistance at 1.1225 and correction to 1.1265.
The market is dominated by negative news background. The chart also dominated by bearish signals. Intra-day preference is given to shorts, which should be considered at resistance levels of 1.1225 and 1.1265.