Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.0635.
- Add a stop-loss at 1.0735.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 1.0730 and a take-profit at 1.0835.
- Add a stop-loss at 1.0650.
The EUR/USD pair remained in a tight range mostly because of the light economic calendar. The pair held steady at 1.0690, unchanged from where it started the week. This price was a few pips below its Friday high of 1.077.
Muted economic calendar
There was no major economic data from the US and Europe on Tuesday and the situation will remain like that on Wednesday. On Tuesday, Eurostat published mixed retail sales numbers from the European Union. The report showed that retail sales were unchanged between March and April. They were about 2.6% lower than in the same period in 2022.
Further data from Germany showed that factory orders dropped again in April. They dropped by 0.4%, a small improvement from the previous month’s 10.9%. These numbers show that the bloc’s biggest economy is seeing some improvement, helped by rising demand.
In Spain, the country’s industrial production dropped by 0.9% in April from the previous increase of 4.1`%. While these are important numbers, their impact on the EUR/USD pair tends to be minimal since they have no major impact on the actions of the European Central Bank.
The same is true for the European numbers that will come out on Wednesday. Germany will publish April’s industrial production data. Economists believe that the country’s industrial production dropped by 1.3% in April after falling by 3.4% in March. France will publish its May trade figures.
Perhaps, the EUR/USD exchange rate will react mildly to statements by De Guindos and Fabio Panetta who are members of the ECB policy committee. The two members will likely provide their views on this month’s meeting.
EUR/USD technical analysis
The EUR/USD pair has been flat this week. It has been stuck at 1.0700, which is between the middle and first resistance line of the Andrews Pitchfork tool. The pair has moved below the 50-period moving average and the 61.8% Fibonacci Retracement level. Further, the Stochastic Oscillator has moved below the oversold level.
Therefore, the pair will likely remain in this range on Wednesday unless there is a surprise news event. If this happens, the EUR/USD price will likely continue falling, with the next reference level being at 1.0635, the lowest point last week.
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