Strong Resistance Waiting For EUR/USD Bulls At Parity Zone
It seems that the EUR/USD is now struggling after approaching the price zone around 0.900s, and some bulls are now taking their money out of the market. Another factor that is stalling the bull run in the EUR/USD is the renewed demand for the US Dollar, which is causing some selling pressure in the currency pair as well.
If we look at the USD index, it seems to be forming a bottom around 110.00 and has thus gained some upside traction. As for the data in the Euro area, the trade surplus of Germany has actually decreased to only 1.2 billion Euro during August. In France, the data for industrial production shows an increase of 2.% on a monthly basis. The services PMI reading in Germany was around 45.0 - So overall, the data is bullish for the Euro!
Key Parity Zone Remains Important
Although EUR/USD has made a rebound, the key zone which is stopping the bull's advance is the party zone, without any doubt!
Experts believe that the Euro price action will be closely linked to the dollar dynamics, the divergence of ECB-Fed, and geopolitical tensions. Let's not forget that the role of central banks in Europe and the USA will also play a key role in how the EUR/USD behaves.
Furthermore, the speculation of a recession in Europe and the USA is also rising at a fast pace. If these fears turn out to be true, then it will have a negative effect on the fundamental data as well!
Looking ahead, some of the key events for the EUR/USD includes the Germany PMI, EMU, Balance of Trade Germany, and the retail sales of Germany.
Experts also believe that the ECB rate hiking cycle will continue into the near future as well. And while we look at the ECB, let's also not forget that the post-election developments in Italy are now gaining traction as well!