The consolidation phase continues ahead of new indications

EUR/USD Current Price: 1.1144

• Germany’s IFO survey showed that the business climate deteriorated further in September.
• The United States will launch CB Consumer Confidence in September.
• EUR/USD lacks directional momentum, downside limited by general US dollar weakness.

EUR/USD continues to trade uneventfully a handful of pips above the 1.1100 mark on Tuesday as bad news from Europe undermined demand for the euro. Germany released the IFO business climate survey, which fell to 85.4 in September from 86.6 posted in August. The current situation rating deteriorated to 84.4, while expectations fell to 86.3, as expected.

Financial markets were cautious earlier in the day as China announced a series of measures to support its battered economy. The People’s Bank of China (PBoC) will cut the reserve requirement ratio (RRR) by 50 basis points (bps) in the short term and cut the seven-day repo rate by 0.2%. Finally, the central bank outlined plans to support the housing market, which included lowering mortgage interest rates. However, stock markets remained afloat throughout the Asian and European sessions.

The next session in the United States (US) will bring the September CB Consumer Confidence, which is expected to improve modestly from the previous 103.3, and the Richmond Fed Manufacturing Index for the same month.

EUR/USD short-term technical outlook

The EUR/USD pair has halved its losses from the month and the daily chart shows that the pair has limited scope for upside, while a steeper decline remains out of the picture. Technical indicators remain in positive levels, albeit without clear directional strength and below their recent highs, reflecting the ongoing consolidation stage. At the same time, a flat 20 simple moving average (SMA) provides dynamic support around 1.1090. Finally, the 100 SMA gains upward traction after crossing above the 200 SMA, both well below the shorter one.

The 4-hour chart shows that the pair is neutral to bearish in the short term. A flat ceiling of the 20 SMA is advancing around 1.1150, while the 100 SMA is targeting marginally higher around 1.1090, strengthening the support zone. Technical indicators, meanwhile, are edging modestly lower below their midlines, reflecting the absence of buying interest rather than supporting a future slide.

Support levels: 1.1090 1.1050 1.1010

Resistance levels: 1.1160 1.1200 1.1250