EUR/USD started this week on a solid bullish momentum, particularly favoured by a weakened US dollar. The Euro underwent an uptrend after an optimistic turnout at the ECB monetary policy meeting last week. The pair had recorded its highest daily gain since March last week’s Thursday after the ECB meeting. The bulls’ excitement pushed the pair so hard to revisit its previous two months’ resistance at 1.06000. However, EURUSD failed to break above this resistance last week before going for a short retracement. On the positive side, EURUSD has returned to this strong resistance during the Asian session, and the bulls are pushing to break it this time.
We are more optimistic that EURUSD will break this resistance this week. Many analysts agree that last week’s ECB monetary policy meeting convinced investors for Euro recovery against the US dollar.
However, EUR/USD needs to break above this resistance at 1.0600 to convince investors that the bulls are fully back again. The pair needs to reclaim the 200-SMA level of 1.0665 as a shred of evidence that it has adjusted its trend. This will open the way to further gains towards the 50% Fibonacci retracement of March-May found at 1.0768.
Fundamental Factors that affect EURUSD today
The German Ifo Business Climate
This data measures the state of Germany’s business environment every month. This data is compiled from a survey involving over 9,000 respondents from German firms in the manufacturing, construction, service, and trade sector.
Notably, the German Business Climate Ifo Survey serves as a leading indicator for significant economic turning points in the German economy.
Policymakers, businesses, and investors use this data to plan future economic activity. Often conclusions are reached using three previous consecutive readings.
This time, a higher reading will be positive/ bullish news for the Euro, while a lower reading will be negative. The forecast for this report is 91.5%. The previous data was 91.8%.
German Buba Monthly Report:
Another critical factor influencing the Euro today is the German Buba Monthly Report. To be released by Deutsche Bundesbank. This report contains relevant articles, speeches, and statistical tables showing the progress in economic growth in the past month. It further provides a detailed analysis of the country’s current and future economic conditions from the bank’s point of view.
Belgian NBB Business Climate:
The third important factor influencing Euro today is the National Bank of Belgium (NBB) Business Climate index released during the New York session. This data measures the change in confidence level in the country’s business operations. Higher levels above zero show an improving Business environment (Climate), while lower levels significantly below zero show a terrible condition.
A higher reading is seen as positive/bullish news for EURO. In comparison, a lower reading is seen as negative/bearish news.
Finally, the German Buba President Nagal will also deliver a speech during the New York session. The highlights from his speech will show the path of growth for the Euro.
