EUR/USD Holds Steady as Key Economic Data Looms; Resistance at $1.1090

EUR/USD remains under pressure as a flurry of economic data from the Eurozone and the U.S. shapes market sentiment.

On Thursday, the Euro weakened following disappointing German Wholesale Price Index (WPI) data, which dropped by 0.8%, missing expectations of a 0.1% increase. This decline signals slowing inflationary pressures in Germany, Europe’s largest economy, and raises concerns about broader economic health across the Eurozone.

Adding to the bearish tone, Italy’s Quarterly Unemployment Rate improved slightly, coming in at 6.8%, below the expected 7.1%. While this is positive news, it wasn’t enough to offset the larger concerns surrounding Eurozone growth, particularly with industrial production data showing a -0.6% decline, worse than the forecast of -0.1%. These weak data points come as the European Central Bank (ECB) holds its Main Refinancing Rate at 3.65%, signaling caution amid softening economic conditions.

EUR/USD is currently steady with a bullish trend, with markets awaiting US inflation data. Keep an eye on upcoming economic indicators as well. #FxWaveCompass pic.twitter.com/CvOytwdqT0

— FxWave (@FxWaveCompass) September 13, 2024

During the ECB Press Conference, policymakers reiterated concerns about persistent inflation but stopped short of introducing any new measures, leaving traders unsure about the ECB’s future direction. The Euro remains vulnerable as traders digest these mixed signals, pushing EUR/USD to struggle against a resilient U.S. Dollar.

Meanwhile, U.S. economic releases showed a mixed picture. Core Producer Price Index (PPI) came in at 0.3%, higher than the expected 0.2%, while unemployment claims stood at 230K, slightly higher than the forecasted 227K. This adds to the uncertainty around U.S. economic resilience as traders await Friday’s Prelim University of Michigan Consumer Sentiment report, forecasted at 68.3.

Looking ahead, EUR/USD traders will closely watch Eurogroup and ECOFIN meetings, which could provide insights into future Eurozone economic policies. Additionally, the U.S. Federal Budget Balance and Import Prices data will offer more clues on U.S. economic conditions, influencing short-term market direction for EUR/USD.

EUR/USD is currently influenced by US inflation data and the ECB's rate decision. The pair recently halted its decline. Traders are watching latest events for potential impacts on the EUR/USD exchange rate. pic.twitter.com/t6oDuOOWto

— FxWave (@FxWaveCompass) September 12, 2024

EUR/USD Daily Technical Outlook – September 13, 2024

EUR/USD is trading at $1.10773, showing minimal gains as traders await upcoming US economic data. The pair faces a key pivot point at $1.1090. A break above this level could signal further bullish momentum, with immediate resistance at $1.1121, followed by $1.1155 and $1.1185.

However, failure to breach the $1.1090 resistance could prompt a bearish retracement toward the first support at $1.1039, with additional downside targets at $1.1002 and $1.0977. The RSI sits at 60, suggesting neutral to slightly bullish sentiment, while the 50-day EMA at $1.1057 acts as immediate support.

Traders should remain cautious of breaking the pivot point, as it will likely dictate short-term direction for the pair.