EUR/USD Needs to Revisit $0.9750 or Face a Fall to Sub-$0.9650

It was a quiet start to the European session for the EUR/USD. Italian industrial production figures for August drew market interest this morning. Following the disappointing manufacturing PMI for September, today’s numbers delivered much-needed EUR support.

According to istat, industrial production jumped by 2.3% in August, following a 0.5% increase in July. Year-over-year, production increased by 2.9%. However, the change of the average of the last three months with respect to the previous three months was -1.2%.

While the numbers were better than expected, industrial production figures are unlikely to influence the ECB’s policy goals to tame inflation.

After today’s stats, ECB member chatter will influence the EUR/USD pair. Members Fabio Panetta, Philip Lane, and Andrea Enria will deliver speeches today. From the IFM meetings, updates will also need consideration, however.

EUR/USD Price Action

At the time of writing, the EUR was up 0.14% to $0.97110. A mixed start to the day saw the EUR/USD slide to an early low of $0.96698 before rising to a high of $0.97249.

Technical Indicators

The EUR/USD needs to breakout from the $0.9711 pivot to target the First Major Resistance Level (R1) at $0.9740 and the Monday high of $0.97531. Following the escalation in the war in Ukraine, ECB chatter will need to be hawkish to support a return to $0.9750.

In the case of an extended rally, the bulls will take a run at the Second Major Resistance Level (R2) at $0.9782. The Third Major Resistance Level (R3) sits at $0.9854.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.9669 in play. In the case of an extended sell-off, the EUR/USD pair would likely test the Second Major Support Level (S2) at $0.9640 and support at $0.96.

The third Major Support Level (S3) sits at $0.9568.

Looking at the EMAs and the 4-hourly chart, the EMAs send a bearish signal. The EUR/USD sits below the 50-day EMA, currently at $0.97863. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A EUR/USD move through R1 ($0.9796) would give the bulls a run at R2 ($0.9782) and the 50-day EMA ($0.97863). However, failure to move through the 50-day EMA ($0.97863) would leave the EUR/USD under pressure. The 200-day EMA sits at $0.98955.

The US Session

It is a quiet day ahead on the US economic calendar., with no economic indicators for the markets to consider. The lack of US stats will leave the EUR/USD pair in the hands of FOMC member chatter.

FOMC members Harker and Mester will speak today, with hawkish chatter likely to pressure the EUR/USD.