Euro remains stable amid mixed economic signals from US and Germany

EURUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0%	-0.5 Pips
Week to-date	-0.12%	-13.1 Pips
March	4.09%	424.3 Pips

Upcoming key events (London Time)

Thu 12:30 PM USD GDP annual rate

What happened lately

In the United States, the housing market showed signs of recovery in February as new-home sales increased by 1.8%. This rebound comes after a significant revision of January’s figures, from an initially reported -10.5% to -6.9%. Despite this positive movement in new-home sales, the U.S. House Price Index experienced a slowdown in growth, decreasing to 0.2% in January from a revised 0.5% in December. These mixed signals indicate a moderate upturn in the housing sector, although the pace of house price growth has softened.

In Germany, business sentiment improved in March according to data from the ifo Institute. The ifo Expectations, which reflect business leaders’ outlook for the economy, rose to 87.7 points from 85.4 points in February. Concurrently, the ifo Business Climate Index, a measure of the overall business environment, increased to 86.7 points, up from 85.2 points. The ifo Current Assessment, representing business leaders’ perception of current economic conditions, also showed an uptick, rising to 85.7 points from 85 points the previous month. This collective increase across various indices suggests a cautiously optimistic view of Germany’s economic prospects.

The EURUSD currency pair remained stable at 1.07990, reflecting the impact of the aforementioned economic indicators. The positive data from Germany supports a stronger euro, while in contrast, the mixed data from the U.S. housing sector limits the U.S. dollar’s strength. With an upcoming high-impact announcement related to the U.S. GDP annual rate, traders might remain cautious, keeping the currency pair in consolidation mode. This upcoming economic indicator could introduce volatility into the EURUSD pair, dependent on whether the GDP data meets, exceeds, or falls short of market expectations. Until then, the pair’s stability signals balance in the market’s perception of economic conditions in both regions.

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What can we expect from EURUSD today?

EURUSD on Tuesday dropped 0% to 1.07990. Price is below 9-Day EMA while Stochastic is falling in oversold zone.

Updated daily direction for EURUSD looks mixed as the pair is likely to consolidate above 1.07943 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.08040 or trades above daily pivot 1.07991. Break above could target R1 at 1.08039. While to the downside, we are looking at 1.07943 (S1) and daily low of 1.07944 as support levels. EURUSD need to break on either side to indicate a short-term bias. A close below 1.07944 would indicate selling pressure.

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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