The EURUSD is crawling back after dropping by more than 0.80% yesterday. As at 04:30 GMT, the pair is trading at 1.1845, which is higher than yesterday’s low of 1.1800. Looking ahead, the pair will today react to the German GDP data and the country’s business expectations numbers by the ifo Institute.
Analysts expect the Q3 German GDP data to show that the economy expanded by 8.2% in the quarter after contracting by 9.7% in the previous quarter. However, because of the pandemic, analysts expect that the economy contracted by 4.1% on a year-on-year basis. That will be a better performance than Q2’s decline of 11.3%.
The EURUSD will also react to US house price index data that will come out at 14:00 and consumer confidence that will be released at 15:00. The Conference Board’s confidence is expected to drop from 100.2 to 98.0 because of the rising Covid cases.
EURUSD technical chart
Turning to the 2-hour chart, we see that the EURUSD dropped to a low of 1.1800 yesterday. That was both a psychological level and also the 61.8% Fibonacci retracement point. Now, the pair is attempting to move back to the yesterday’s level close to 1.1900. However, a closer look shows that it is forming a bearish consolidation pattern, in a sign of indecision in the market.
Therefore, for today, I predict that the pair will attempt to retest yesterday’s lowest point at 1.1800. However, this trade will be invalidated if it manages to move above the 78.6% retracement level.
EUR/USD technical chart