There is a likelihood that the pair will soon bounce back.
- Set a buy-stop at 1.1880 and a take-profit at 1.1950.
- Add a stop-loss at 1.1800.
- Timeline: 1-2 days.
- Set a sell-stop at 1.1850 and a take-profit at 1.1750.
- Add a stop-loss at 1.1920.
The EUR/USD pair declined on Tuesday morning as traders waited for the latest German economic sentiment and Eurozone GDP numbers. The market is also reacting to the recent American jobs numbers. It is trading at 1.1860, which is slightly below last Friday’s high of 1.1904.
Eurozone GDP Data Ahead
The EUR/USD tilted lower on Monday as investors continued focusing on the recent employment numbers from the United States. The data, published on Friday, showed that the American economy added just 235k jobs in August, a sharp decline after it added more than 1 million in the previous month. On a positive note, the country’s unemployment rate declined while wages rose, which is a sign that the labour market remains tight.
Later today, the EUR/USD pair will react to the September sentiment data from Germany. The number is expected to show that the Germa economic sentiment declined from 40.4 in August to 30.0 in September. On the other hand, the ZEW current conditions is expected to have a modest improvement from 29.3 to 34.0.
The other key mover for the pair will be the final estimate of the Eurozone GDP data by Eurostat. Economists polled by Reuters expect that the Eurozone economy expanded by 2.0% in the second quarter. This, in turn, is expected to translate to a 13.6% annualized increase. Since these are the third estimates of the GDP numbers, their impacts on the pair will likely be limited unless of a major beat or miss.
These numbers come at a time when investors and analysts have started pricing in a relatively hawkish European Central Bank (ECB) when it meets on Thursday. Besides, it seems like the Eurozone has handled the Delta variant outbreak in a better way than other countries. Also, the bloc’s consumer inflation has moved above the ECB target of 2.0%.
The EUR/USD rose to the key resistance at 1.1908 on Friday after the latest US employment numbers. This was a key level since it was the highest level on July 30th. It was also notable since it was the upper part of the V-shaped or cup and handle pattern. This pullback also seems like the handle section.
The pair is slightly above the upper part of the ascending channel and is above the 25-day and 50-day moving averages. Therefore, there is a likelihood that the pair will soon bounce back. This view will be confirmed when it moves above the resistance at 1.1908.