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EUR/USD Erases Daily Losses After Weak U.S. Housing Data

ByAlex Boltyan
Published 08/16/2022, 03:34 PM
Updated 07/09/2023, 06:32 AM

The EUR/USD pair trades with modest gains on Tuesday, having erased daily losses triggered by disappointing ZEW survey data from the E.U. and Germany. Weak U.S. housing data weighed on the dollar and helped the pair to move north.
 
At the time of writing, the EUR/USD pair is trading at 1.0170, 0.13% above its opening price after bouncing from a two-week low of 1.0122.
 
The German ZEW Economic Sentiment survey for August plunged to -55.3 and missed expectations of -53.8, while the sentiment for the whole union fell to -54.9, missing by far the market’s forecast of -42.5. Separated data showed June’s seasonally adjusted Trade Balance of the union posted a deficit €30.8 billion, worsening the economic outlook.
 
Across the pond, the weakness of the U.S. housing market helped to halt the EUR/USD decline, as the July Building Permits fell by 1.3% on a monthly basis while the Housing Starts declined by 9.6%. The U.S. dollar, measured by the DXY index, pulled back from a daily high of 106.95 to trade virtually unchanged on the day at around the 106.50 level.
  EURUSD Daily Chart
From a technical perspective, the EUR/USD holds a short-term bearish outlook as daily indicators keep signaling a deceleration of the bullish momentum. The RSI hovers below its midline although the slope has flattened, while the MACD printed a lower green bar and it's close to breaking below its signal line.
 
On the downside, the next support levels are seen at the 1.0150 zone, followed by the 1.0100 and then the parity level, which, if lost, would potentially open the door to new cycle lows. On the other hand, resistance levels could be found at the 20-day SMA, currently at 1.021, followed by the 1.0250 area and then the 1.0300 psychological mark.

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