Quick Look
- EUR/USD steadies around 1.0855 amid weak US economic data, awaiting key GDP and European confidence reports.
- US consumer confidence and durable goods orders fell short of expectations, hinting at economic pressures.
- Technical analysis reveals EUR/USD hovering below key resistance, with signs of a bullish trend.
- Upcoming data include US GDP forecasts, German retail sales, and CPI inflation, which are crucial for future direction.
- Markets show a limited reaction to recent reports, with eyes set on forthcoming economic indicators.
The EUR/USD pair has demonstrated resilience, maintaining its position around 1.0855 despite a series of disappointing economic indicators from the United States. Notably, consumer confidence, as reported by the Conference Board, dipped significantly from 110.9 in January to 106.7 in February, falling short of the median forecast of 114.8. This decline marks a considerable drop, reflecting growing consumer apprehension. Furthermore, January witnessed a decline in durable goods orders by 0.3% month-over-month, contrary to the anticipated 0.2% increase. This decline extends to a 6.1% year-over-year drop, missing the consensus estimate of 4.9%. The housing market’s slowdown is evidenced by the marginal rise in the house price index by 0.1% in December, a deceleration from the previous month’s 0.4% increase. These figures, alongside weak retail sales and industrial production data, signal potential challenges for the Federal Reserve as it navigates between curbing inflation and managing economic slowdown.
US GDP at 3.3%, Eurozone Faces Struggles
The market is now pivoting to the forthcoming US GDP figures and European confidence indices. Analysts anticipate the US GDP to have expanded by 3.3% in Q4, a slowdown from the 4.9% growth observed in the preceding quarter. Meanwhile, European confidence indicators, as published by Eurostat, are expected to remain subdued, reflecting the economic struggles within the bloc, with Germany notably entering a recession phase.
EUR/USD Eyes Breakout; Key Levels at 1.0900
From a technical standpoint, the EUR/USD pair presents a mixed outlook with a slight bullish inclination. The pair’s stability below the significant resistance level of 1.0885 and the formation of an inverse head and shoulders pattern hint at potential upward movement. This is further supported by a bullish crossover of the 50-period and 100-period moving averages and the MACD indicator’s position above the zero line. However, resistance and support levels at 1.0900 and 1.0800 are crucial for determining the pair’s short-term direction.
Critical Data to Shape Fed Policy, EUR/USD
As the market braces for the release of key economic data, the EUR/USD pair’s trajectory remains uncertain. The data includes the US GDP, German retail sales, and CPI inflation figures. Consequently, these reports are critical for shaping market sentiment. Furthermore, they could influence the Federal Reserve’s policy decisions. Currently, the pair is exhibiting a pattern of higher lows. However, it is also facing firm resistance. Therefore, the upcoming data will likely play a pivotal role in defining the near-term market dynamics.
