EUR/USD under pressure as Germany's Ifo index misses expectations; US Dollar strengthens on robust Durable Goods Orders.
US Dollar Index steady at 100.88, supported by a 9.9% surge in Durable Goods Orders; key pivot at 100.92 in focus.
US 10-year bond yield consolidates near 3.82%, with potential impacts on the Dollar; key resistance at 3.84%.
Market Overview
Recently, the EUR/USD pair has been under pressure, with the Euro struggling against the Dollar. Germany’s Ifo Business Climate index, a key indicator of economic health, fell to 86.6, missing expectations of 87.0. This softer data underscores concerns about the Eurozone’s largest economy, contributing to the Euro’s weakness.
Meanwhile, the US Dollar Index (DXY) remains steady around 100.88, supported by a surprising 9.9% jump in US Durable Goods Orders—far surpassing the 4.0% forecast.
This robust US data has strengthened the Dollar and kept the EUR/USD under downward pressure, with the pair trading around 1.1165. Additionally, the US 10-year bond yield is consolidating near 3.82%. If yields rise, it could further boost the Dollar, making it harder for the Euro to recover.
Events Ahead
Looking ahead, traders will closely monitor the upcoming speech from German Buba President Nagel, which could offer insights into the Eurozone’s economic direction and impact the EUR/USD.
On the US side, key data releases, including the CB Consumer Confidence Index (forecasted at 100.9) and the Richmond Manufacturing Index (expected at -14), will be crucial.
A stronger-than-expected Consumer Confidence reading could push the Dollar Index higher, potentially driving the EUR/USD lower. Additionally, any significant movement in the US 10-year bond yield will be important to watch, as a rise in yields could further support the Dollar, putting more pressure on the Euro.
US Dollar Index (DXY)
Dollar Index Price Chart – Source: Tradingview
The Dollar Index (DXY) is currently at $100.88, holding steady. The pivot point at $100.92 is crucial. If the index stays above this level, it could move higher, with immediate resistance at $101.17, followed by $101.60 and $101.96.
However, if it falls below $100.92, a bearish trend could develop, with immediate support at $100.53, and further support at $100.28 and $99.98.
The 50-day EMA at $101.53 and the 200-day EMA at $102.99 indicate that the index is under pressure, with the downward channel adding resistance near $100.90. If the index remains below $100.92, we could see a sharper decline, but staying above it might trigger some buying interest.
US 10-year Bond Yields
US10 Year Bond Yields- Source: Tradingview
The US 10-year bond yield is currently at 3.82%, showing signs of consolidation after a recent decline. The chart indicates a downward trend, with the yield struggling to break above the 50-day EMA at 3.84%.
If the yield fails to rise, it suggests investors expect lower future interest rates, which could weaken the US Dollar. The Dollar Index (DXY) tends to move in tandem with yields—higher yields attract more foreign investment, boosting the dollar. If yields remain suppressed, the dollar might face downward pressure.
However, a breakout above the 3.84% level could signal a rebound in both the yield and the dollar.
EUR/USD Technical Forecast
EUR/USD Price Chart – Source: Tradingview
The EUR/USD is trading at $1.11647, up 0.06%. The key pivot point is $1.11591, which serves as crucial support. If the price remains above this level, the outlook is bullish, with immediate resistance at $1.12015, followed by $1.12284 and $1.12533.
On the downside, immediate support is at $1.11322, with further support levels at $1.11052 and $1.10790. The 50-day EMA at $1.11013 and the 200-day EMA at $1.09639 suggest a strong uptrend, with the upward trendline providing additional support near $1.11591.
As long as EUR/USD holds above this level, the pair is likely to maintain a bullish trend. However, a break below could trigger a sharper decline.
Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
