EUR/USD is taking a break on Tuesday after briefly rising above 1.10 on Monday. Markets are digesting the turbulence from Monday's market crash following the Japanese stock indices meltdown. In a surprising turn of events, Germany's Factory Orders saw an unexpected surge of 3.9% in June.
On Tuesday, EUR/USD is trading below 1.0950 after some gains at the start of the week following a weak US Nonfarm Payrolls (NFP) report on Friday. Fears of a recession spooked the markets, leading to an equity crisis in Asia where the Nikkei and Topix indices in Japan lost over 10% in a single day. Markets are recovering on Tuesday, with the US Dollar gaining against other currencies and recovering most of Monday's losses.
The correction in EUR/USD on Tuesday seems to be gradual and not very significant. Germany's impressive Factory Orders data for June is supporting the Euro after a strong performance. Expectations were low at a 0.8% increase in June, but the actual data surpassed expectations by recording a positive 3.9% increase.
Federal Reserve Bank officials Austan Goolsbee and Mary Daly reassured traders overnight, stating that softer economic numbers are not a cause for concern. They emphasized that the job market remains strong and there are no major permanent layoffs. Although recession fears have eased, concerns are rising that the Fed may not meet expectations on rate cuts when necessary.
EUR/USD is facing resistance after encountering strong selling pressure above 1.10. The Relative Strength Index (RSI) is nearing overbought levels, indicating a potential pullback before another rally. On the upside, key resistance levels are at 1.1017, 1.1139, and a possible move towards 1.1275 if the Fed implements an emergency rate cut.
For support, the 1.09 level is significant, with the belt of moving averages around 1.08 being the next area to monitor. The 200-day Simple Moving Average at 1.0830 holds importance and could provide support in the current market conditions.
On Tuesday, EUR/USD is trading below 1.0950 after some gains at the start of the week following a weak US Nonfarm Payrolls (NFP) report on Friday. Fears of a recession spooked the markets, leading to an equity crisis in Asia where the Nikkei and Topix indices in Japan lost over 10% in a single day. Markets are recovering on Tuesday, with the US Dollar gaining against other currencies and recovering most of Monday's losses.
The correction in EUR/USD on Tuesday seems to be gradual and not very significant. Germany's impressive Factory Orders data for June is supporting the Euro after a strong performance. Expectations were low at a 0.8% increase in June, but the actual data surpassed expectations by recording a positive 3.9% increase.
Federal Reserve Bank officials Austan Goolsbee and Mary Daly reassured traders overnight, stating that softer economic numbers are not a cause for concern. They emphasized that the job market remains strong and there are no major permanent layoffs. Although recession fears have eased, concerns are rising that the Fed may not meet expectations on rate cuts when necessary.
EUR/USD is facing resistance after encountering strong selling pressure above 1.10. The Relative Strength Index (RSI) is nearing overbought levels, indicating a potential pullback before another rally. On the upside, key resistance levels are at 1.1017, 1.1139, and a possible move towards 1.1275 if the Fed implements an emergency rate cut.
For support, the 1.09 level is significant, with the belt of moving averages around 1.08 being the next area to monitor. The 200-day Simple Moving Average at 1.0830 holds importance and could provide support in the current market conditions.
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