Eurusd rises 0.41% amidst mixed economic signals in U.S. and Europe

EURUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.41%	43.4 Pips
Week to-date	0.36%	37.6 Pips
February	1.11%	115.1 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD GDP annual rate

What happened lately

In the United States, the Federal Housing Finance Agency’s data shows that the U.S. House Price Index remained stable with an increase of 0.4% for December, similar to November’s figures. This stability in housing prices suggests a steady real estate market without significant upward or downward pressure, indicating that consumer confidence in the housing sector remains relatively intact despite broader economic challenges.

In Germany, the economy faces stagnation as evident from its Gross Domestic Product (GDP) metrics. The GDP over various periods including the year-on-year, quarterly, and three-month assessments showed no change, persisting at negative growth rates. Specifically, the GDP remained at -0.4% for the 12-month and -0.2% for the quarter indicators, indicating challenges in economic recovery. However, the mood among businesses shows slight improvement. The ifo Business Climate Index for February recorded a small rise to 85.2 points, with the ifo Expectations also climbing to 85.4 points. Despite this, the Current Assessment fell to 85 points from January’s reading of 86.1 points, pointing to existing hurdles in the economic environment, although future sentiment is seeing a gradual lift.

The EURUSD currency pair saw an increase of 0.41% to 1.05124 on Tuesday, likely influenced by the mixed economic signals from both the U.S. and Europe. The stability in the U.S. housing market suggests a controlled economic environment, whereas Germany’s slight improvement in business sentiment amid stagnant GDP figures may reflect marginal optimism about future economic conditions, possibly supporting the euro. However, the anticipated U.S. GDP annual rate release, marked as a high-impact event, could create volatility and potentially reverse this trend depending on how the U.S. growth figures align with market expectations. Economic data suggesting robust U.S. growth could pressure EURUSD downwards, while weaker figures might favor the euro, maintaining its recent gains against the dollar.

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What can we expect from EURUSD today?

EURUSD on Tuesday rose 0.41% to 1.05124. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for EURUSD looks bullish as the pair ended higher after Tuesday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.05358 with break above could target R2 at 1.05593 or figure level area. While towards the downside, we are looking at daily low of 1.04559 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.05193 may suggest continuation after recent positive movement.

For the week to-date, take note that EURUSD is mixed as compared to the prior week.

Key levels to watch out:

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