EUR/USD Outlook: Direction Change after Weak German Data But US-China Talks Still Key Driver

Technical analysis of Forex market

The Euro trades in red on Monday after attempts to extend last Friday’s 0.53% advance failed to clearly break above falling 30DMA (1.1152).

The single currency came under pressure after downbeat German Ifo data (Aug 94.3 vs 95.1 f/c and 95.8 in July) that increased concerns that Germany is heading for recession.

Fresh weakness retraced a good part of Friday’s rally and cracked 10DMA support (1.1110), with close below to generate fresh bearish signal for further weakness.

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Rising bearish momentum on daily chart supports the notion, however, the development of US-China trade talks is expected to be the key driver.

Res: 1.1135; 1.1152; 1.1163; 1.1173
Sup: 1.1106; 1.1063; 1.1051; 1.1027

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