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The Euro Slows Down the Development of the "Bearish" Trend

2/8/2023 10:31 AM

The EUR/USD pair shows multidirectional trading dynamics, consolidating near 1.0730. The instrument is gradually developing a "bearish" trend, which has been observed since February 2, but the day before it showed a tendency to corrective growth, which, however, did not end with noticeable success. One way or another, the European currency retreated from its local lows of January 9 and is now looking for fundamental drivers to return the upward dynamics.

The macroeconomic statistics released yesterday in Germany put additional pressure on the euro positions. Industrial Production in December showed a decline of 3.1% after rising by 0.4% in the previous month, while analysts expected -0.6%, and in annual terms, the figure was -3.9% after -0.5 % in November, while forecasts assumed that the negative dynamics would remain at the level of -0.2%. Investors are looking forward to tomorrow's publication of January statistics on inflation in Germany, which is expected to reflect another acceleration of the Consumer Price Index from 8.6% to 8.9% in annual terms and from -0.8% to 0.9% in monthly terms.

Another negative factor for the euro is the expectations of traders regarding the possible completion of the cycle of raising interest rates by the European Central Bank (ECB), comments on which can be traced from official representatives of the regulator.

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is expanding, but still has not caught up with the surge of "bearish" activity. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic, having reached its lows, is trying to reverse in the direction of growth, signaling in favor of the development of corrective dynamics in the near future.

Resistance levels: 1.0765, 1.0800, 1.0850, 1.0928. | Support levels: 1.0700, 1.0668, 1.0600, 1.0550.

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