The Euro traded lower near the 1.1370 area on Monday, giving up earlier gains as investors adopted a cautious stance ahead of the release of preliminary second-quarter Gross Domestic Product (GDP) data from Germany and the broader Eurozone, as well as the upcoming Federal Reserve monetary policy decision [1]. The EUR/USD pair was last seen at 1.1372, maintaining a bearish near-term bias, with the pair capped beneath the 20-period Simple Moving Average (SMA) at 1.1391 and the 100-period SMA at 1.1420. The 14-period Relative Strength Index (RSI) hovered at 41, indicating subdued momentum and weak buying interest [1].
Improved global risk sentiment was noted following a pause in hostilities between the United States and Iran, which led to a sharp decline in oil prices. West Texas Intermediate (WTI) Oil traded near $83.60 per barrel, falling more than 7% as concerns over supply disruptions eased. This development contributed to a rally across stock and bond markets [1].
Market participants are closely watching the upcoming Eurozone GDP figures, with expectations for a 0.2% quarter-on-quarter expansion after a 0.2% contraction previously, and annual growth forecast to accelerate to 0.4% from 0.3%. Germany's economy is expected to stagnate on a quarterly basis following a 0.3% expansion, while annual GDP growth is projected to rise to 0.6% from 0.4%. Weaker-than-expected data could heighten concerns about the region's economic outlook and exert further pressure on the Euro [1].
Additionally, Germany's preliminary July Consumer Price Index (CPI) will be closely monitored. Monthly inflation is expected to rise 0.7% after a 0.3% decline, with annual inflation previously at 2.3%. Stronger inflation data could bolster expectations that the European Central Bank will maintain a restrictive policy stance, potentially supporting the Euro [1].
Technical analysis suggests that immediate resistance for EUR/USD is at 1.1375, followed by 1.1386 and a denser barrier at 1.1391, with further resistance at 1.1420. Immediate support is seen at 1.1369; a break below this level could extend the current bearish phase, while holding above it would keep the pair in a corrective consolidation beneath resistance [1].
CONCLUSION
The Euro's flat performance reflects investor caution ahead of key economic data releases and the Federal Reserve's policy decision. A sharp drop in oil prices has improved risk sentiment, but the Euro remains under pressure due to technical resistance and uncertainty over Eurozone growth. Upcoming GDP and inflation data from Germany and the Eurozone will be critical in shaping the Euro's near-term direction.