The EUR/USD forex day trading encountered several catalysts this week. This has led to a sideways movement on Monday following the release of weak economic data from the US. Reports indicated a decline in the country’s manufacturing production by 0.3% and industrial production by 0.5% in June. Additionally, retail sales dropped by 0.2% during the same period, reflecting a significant impact on consumer spending, a crucial aspect of the American economy. Despite these economic challenges, inflation rates decreased while consumer confidence surged.
Looking ahead, the market’s focus shifts to the latest European consumer inflation data, where economists expect the headline consumer price index (CPI) to rise by 0.3% in June, leading to a 5.5% increase. Core inflation is also predicted to rise by 0.3% MoM and 5.4% YoY. These figures, if accurate, may impact the European Central Bank’s (ECB) decisions on interest rates.
The EUR/USD exchange rate has maintained a consolidation phase recently. Besides, it remained slightly above the 50-period moving average and a critical support level at 1.1095 (April high). The Relative Strength Index (RSI) has shifted from an overbought level of 85 to 63, while the Stochastic Oscillator moved below the neutral level of 50 but still remains above the Ichimoku cloud.
Given the technical analysis, there is a possibility of the pair experiencing a short-term pullback, with sellers potentially targeting the key support at 1.1095. In this scenario, the stop-loss for the trade could be set at 1.1325.
Traders may opt to sell the EUR/USD pair, setting a take-profit level at 1.1150 while placing a stop-loss at 1.1300. The expected timeline for this trade is 1-2 days.
Alternatively, a buy-stop can be placed at 1.1240, aiming for a take-profit level at 1.1320, with a stop-loss at 1.1180.
On Wednesday morning, the euro was steady, with the EUR/USD price trading at 1.1225, a few pips below the week’s high of 1.1275. Traders are eagerly awaiting the release of European consumer inflation numbers, which could potentially impact the forex day trading’s direction in the short term.
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