The trade remains at the 0.9900 barrier due to the EUR/USD. In October, the business climate in Germany remained unchanged. Later in the discussion, US Consumer Confidence will take center stage.
Around the European currency, there is a lack of consensus on a direction, which causes EUR/USD to trade on Tuesday with a negative bias around 0.9860.
EUR/USD emphasizes risk trends, and the dollar
With the dollar again lacking a clear trend, the EUR/USD sputters once more before the critical barrier at 0.9900 and experiences some modest negative pressure.
The German 10-year bund yields, which have been hovering around the 2.25% range so far, have dropped for the third time in a row, which coincides with the pair’s indecisive price action.
The IFO Institute’s Business Climate Index, released in the domestic calendar and held steady at 84.3 for October, had no response in the pair.
On the other side of the pond, the FHFA will release its House Price Index before the Conference Board’s more pertinent Consumer Confidence print.
What to watch for in the EUR?
Following Tuesday’s unsuccessful effort to test or above the 0.9900 level, the EUR/USD is under pressure.
Price movement around the currency is anticipated to closely track dollar trends, geopolitical tensions, and the Fed-ECB divergence in the interim. The latter is anticipated to continue to grow in light of recent findings from critical economic indicators, given the continued strength of the US economy.
Additionally, the growing fears of a regional recession – which seem to be supported by declining mood indicators and an impending downturn in certain fundamentals – contribute to the pessimistic outlook for the euro.
Important occurrences in the euro zone this week: Germany Tuesday’s IFO Business Climate: France Wednesday’s consumer confidence data for Germany Italian GfK Consumer Confidence, ECB Lagarde (Thursday) Interest Rate Decision, France/Italy/Germany Germany’s Flash Inflation Rate Q3 GDP Growth Rate, EMU, preliminary Economic sentiment and final consumer confidence.
The continuation of the ECB’s rate hike cycle vs. rising recession concerns are important topics simmering in the background. Impact of the conflict in Ukraine and the ongoing energy shortage on the prognosis for inflation and growth in the area.
Watching the EUR/USD levels
The pair is now declining by 0.02% at 0.9871, and a break of 0.9631 (the month’s low on October 13) would aim for 0.9535 (2022’s low on September 28) before reaching 0.9411. (weekly low June 17, 2002). On the other hand, the subsequent upward barrier is at 0.9899 (weekly high October 24), followed by 0.9999 (monthly high October 4), and lastly, 1.0050. (weekly high September 20).