The EUR/USD pair remains under pressure as the rift between the U.S. and European economies persists.
Recent economic data shows that the European economy is in poor shape. Data on Monday showed German exports fell again in July. Exports fell 0.9 percent in June after rising 0.2 percent. Imports increased by 1.4%, and the trade surplus decreased by 15.9 billion euros.
Germany’s real estate sector has also shrunk, with many companies in the sector struggling. Real estate companies face weak demand and scarce liquidity, with interest rates remaining at their highest levels in years.
The EURUSD pair reacted mutedly to a statement from European Central Bank (ECB) President Christine Lagarde. The bank confirmed in a statement in London that it will rely on the data when making its decision this month.
The latest economic data from Europe showed that core CPI fell to 5.3% in July. The European Central Bank insists it wants to see signs of a sustained economic downturn before halting rate hikes.
EUR/USD will remain within a narrow range on Tuesday. The key figures to watch are Europe’s quick service data and composite PMI data. Economists expect the services PMI to fall to 48.3 in August, while the composite PMI will fall to 47.
Eurostat will also release the latest European producer price index data. Economists expect the data to show that the producer price index fell 0.6% in July, which would mean a year-on-year decline of 7.6%.
The only data of note from the U.S. will be the latest factory order numbers. While these numbers are important, they’re unlikely to have much of an impact on either man.
The EURUSD pair started declining after peaking at 1.1273 on July 18. On the 4-hour chart, the pair is approaching the 78.6% Fibonacci retracement level. The pair fell below the 25 and 50-period moving averages. The next support level deserves attention at 1.0700.
