Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.0800.
- Add a stop-loss at 1.100.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 1.0930 and a take-profit at 1.1008.
- Add a stop-loss at 1.0840.
The EUR/USD exchange rate recovered modestly ahead of the upcoming American consumer confidence and the important housing data. The pair rose to a high of 1.0918, higher than last Friday’s low of 1.0846.
US consumer confidence data
The EUR/USD pair bounced back ahead of the crucial consumer confidence numbers. These are important since consumer spending is the biggest part of the American economy. Economists polled by Reuters expect the data to show that consumer confidence rose from 102.3 in May to 103.7 in June. A higher figure is a leading indicator of retail sales.
The US will also publish important housing numbers that will shed light on the real estate industry. The first important data will be new home sales numbers. Economists expect the data to show that new home sales dropped from 683k to 670k in May.
Last week, data published by the government’s statistics agency revealed that housing starts and building permits did well in May, signaling that the sector was doing well. Other housing data to watch on Tuesday will be the house price index data. Economists expect the data to show that the house price index rose by 3.1% in April.
Further data that could move the EUR/USD pair on Tuesday will be durable goods orders. Economists polled by Reuters expect the numbers to reveal that durable goods orders dropped by 1.0% while core durable goods orders fell by 0.2%. These numbers are important because they are good indicators of the economic performance.
There will be no major economic data from Europe on Tuesday. The only ones to watch will be the Italian consumer and business confidence numbers. On Monday, data showed that German business confidence dropped in June.
EUR/USD technical analysis
The EUR/USD pair dropped to a low of 1.0844 on Friday and then erased some of these losses on Monday. On the 4H chart, the pair moved above the 25-period and 50-period moving averages. It moved to the Woodie pivot point and the Ichimoku cloud.
The Relative Strength Index (RSI) moved to the neutral point of 50. Therefore, the pair will likely rise slightly and then resume the downward trend. If this happens, the EUR to USD will retest last Friday’s low of 1.0845 followed by the first support at 1.0800.
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