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James Hyerczyk
EUR/USD

The Euro is trading higher against the U.S. Dollar on Tuesday, bolstered by a report showing investor sentiment in Germany improved more than expected in August. The ZEW economic survey of economic sentiment rose to 71.5 from 59.3 points the previous month, far exceeding a forecast for 58.0 in a Reuters poll of economists.

At 12:34 GMT, the EUR/USD is trading 1.1791, up 0.0054 or +0.46%.

In the U.S on Tuesday, Core PPI jumped 0.5% versus an estimate of 0.1%. PPI rose 0.6% versus 0.3%.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1916 will signal a resumption of the uptrend. The main trend will change to down on a move through 1.1185, which makes its safe for now.

The minor trend is also up. The minor trend changes to down on a trade through 1.1722. This will shift momentum to the downside. A trade through 1.1696 will confirm the shift.

The minor range is 1.1696 to 1.1916. Its 50% level at 1.1806 is resistance. Trader reaction to a test of this level could determine whether the market continues to head into 1.1916, or whether there is enough short-term selling pressure to form a potentially bearish secondary lower top.

The short-term range is 1.1371 to 1.1916. If the minor trend changes to down then, look for the selling to extend into 1.1644 to 1.1579.

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Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 1.1791, the direction of the EUR/USD the rest of the session on Tuesday should be determined by trader reaction to 1.1806.

Bullish Scenario

A sustained move over 1.1806 will indicate the presence of buyers. The first target is 1.1819. Overtaking this level will indicate the buying is getting stronger.

Bearish Scenario

A sustained move under 1.1806 will signal the presence of sellers. They are trying to form a secondary lower top. This could lead to a retest of the minor bottoms at 1.1722 and 1.1696. If they fail then momentum will shift to the downside and the EUR/USD is likely to continue into 1.1644 to 1.1579.

For a look at all of today’s economic events, check out our economic calendar.

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