trades close to Tuesday’s high slightly above 1.0800 in Wednesday’s European session. The major currency pair remains sideways for a third consecutive day as investors await key macroeconomic data from both the Eurozone and the United States (US) that is likely to inject volatility into the pair. In Europe, the October preliminary Harmonized Index of Consumer Prices (HICP) data from Germany and six of its states, and from Spain will indicate whether inflationary pressures continue to remain within the European Central Bank’s (ECB) target of 2%.Economists estimate the German HICP to have grown at a faster pace of 2.1% from 1.8% in September, while inflation in Spain is expected to have remained below 2%.Unless there is a big upside surprise, the impact of the inflation data is expected to be less significant on the ECB’s interest rate action in its upcoming policy meeting in December as officials see price pressures softening faster than what the central bank had anticipated.Recent commentaries from policymakers have indicated that they are worried about inflation remaining persistently lower due to weakening economic growth. Market participants are worried about the of the Eurozone economy. Meanwhile, uncertainty ahead of the US presidential election persists. While national polls have indicated tight competition between former US President Donald Trump and current Vice President Kamala Harris, traders seem to be pricing in a Trump victory, which would have deep repercussions also for the Eurozone. Trump has promised a universal 10% tariff on all imports, except those from China, which would face even bigger tariffs. The threat of tariffs could impact the Eurozone’s powerful export sector significantly. Investment banking firm Goldman Sachs projects a 1% drop in the Eurozone’s (GDP) if a universal 10% tariff is imposed.In Wednesday’s session, investors will also focus on the flash Q3 data of the and its major regions. Market participants will pay close attention to German growth numbers as the region’s largest economy is forecasted to contract for the second quarter in a row.Meanwhile, the preliminary French Q3 GDP grew at an expected pace of 0.4%, faster than 0.2% in the second quarter of this year.
Daily digest market movers: EUR/USD stays on sidelines as US Dollar rally stalls
Technical Analysis: EUR/USD stays within tight range around 1.0800(Click on image to enlarge)EUR/USD consolidates around 1.0800 in European trading hours on Wednesday. The shared currency pair continues to hold above the upward-sloping trendline near 1.0750, which is plotted from the October 3, 2023, low at around 1.0450 on the daily time frame. However, the broader outlook of the major currency pair remains bearish as it stays below the 200-day Exponential Moving Average (EMA), which trades around 1.0900.The downside move in the shared currency pair started after a breakdown of a Double Top formation on the daily time frame near the September 11 low at around 1.1000, which resulted in a bearish reversal.The 14-day Relative Strength Index (RSI) remains in the 20.00-40.00 range, pointing to more downside ahead.On the downside, the major pair could see more weakness towards the round-level support of 1.0700 if it slips below 1.0750. Meanwhile, the 200-day EMA near 1.0900, and the psychological figure of 1.1000 emerge as key resistances.More By This Author:USD/CAD Price Forecast: Hesitates To Break Above 1.3900 EUR/USD Ticks Up Ahead Of US JOLTS Job Openings Data Pound Sterling In Tight Range With UK Budget In Focus
