The Euro is edging higher against the U.S. Dollar early Tuesday after testing its lowest level since August 4 earlier in the session. Monday’s session was all about the U.S. Dollar as investor focus on the fiscal stimulus plan in the United States and U.S.-China tensions ahead of key trade talks this week increased the greenback’s appeal as a safe-haven currency.
At 03:24 GMT, the EUR/USD is trading 1.1744, up 0.0008 or +0.07%.
In other news, investor morale in the Euro Zone rose for a fourth consecutive month in August but the low reading suggests that the coronavirus-hit economy is still in recession in the third quarter, a survey showed on Monday.
Sentix’s index for the Euro Zone improved to -13.4 from -18.2 in July. That was its highest reading since pre-lockdown times in February and compared with the Reuters consensus forecast for a reading of -15.1.
The current situation index rose to -14.3 from -49.5 in July, its highest reading since March.
Meanwhile, sentiment in Germany picked up for a fourth straight month, with investors feeling more upbeat about both the current situation and the future. Sentix suggested this may be linked to a surge in industrial orders in June.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A move through 1.1916 will signal a resumption of the uptrend. The main trend is safe for now, it will change to down on a trade through the nearest main bottom at 1.1185.
The minor trend is also up. A trade through 1.1696 will change the minor trend to down. This will also shift momentum to the downside.
The minor range is 1.1696 to 1.1916. Its 50% level at 1.1806 is potential resistance.
The short-term range is 1.1371 to 1.1916. Its retracement zone at 1.1644 to 1.1579 is the first downside target zone. Since the main trend is up, buyers are likely to come in on a test of this area.
The main range is 1.1185 to 1.1916. Its retracement zone support is 1.1550 to 1.1464.
The combination of the short-term and main ranges creates a support cluster at 1.1579 to 1.1550.
Daily Technical Forecast
The way of least resistance is down according to the Gann angle configuration. If this creates enough downside momentum, then look for the selling to possibly extend into the minor bottom at 1.1696. Taking out 1.1696 will indicate the selling pressure is getting stronger with the next target a 50% level at 1.1644.
On the upside, the first potential Gann angle resistance comes in at 1.1765, followed by a downtrending resistance angle at 1.1796. Overcoming the angles will put the EUR/USD in a position to challenge the 50% level at 1.1808.