EUR/USD Daily Price Forecast – EUR/USD Recovers Yesterday’s Loss Post German Macro Data Update

The euro recovered on Tuesday from earlier losses linked to the collapse of the Turkish lira, but investors said the exposure of European banks to Turkey would continue to hound the single currency. After the Monday Mayhem from the Turkey contagion, a sense of calm descended on FX markets during today’s Asian session. USD/TRY headed lower from its record high yesterday as the markets digested the impact and effectiveness of the central bank’s measures announced yesterday. The single currency alternates gains with losses on Tuesday and took EUR/USD to the 1.1400 region in the wake of German data releases. The pair managed to rebound from 13-month lows in the 1.1360 region on Monday although it still remains under pressure amidst heightened uncertainty around the Turkish Lira and its impact on the broader EM FX space. As of writing this article the pair is trading at 1.1388 down 0.19% on the day and is expected to continue range bound movement ahead of Eurozone GDP data.

Eurozone Macro Data Remains Main Focus Of The Day As Positive Outcome Could Help EURO Bulls Gain Momentum

EUR remained apathetic after German final inflation figures showed the CPI rose 0.3% MoM in July and 2.0% over the last twelve months. The broader HICP came in at 0.4% and 2.1%, matching the preliminary readings. Still in Germany, the advanced GDP figures showed the economy is seen expanding 0.5% QoQ and 2.3% on a yearly basis during Q2. On the USD-side, DXY – the index which measures strength of greenback against six major currencies was headed for its biggest daily decline this month down 0.20% on the day around 96.23 handle, but is underpinned by the risk-off mood and the unabated effervescence around the US-China trade dispute. Moving forward with today’s market session, investors will remain focused on Eurozone ZEW economic sentiment index data, GDP & Industrial production data. The consensus amongst traders expects the bloc’s economic growth to remain steady at 0.3% inter-quarter in Q2, while on an annualized basis, is also seen unchanged at 2.1%.

At the same time, the ZEW will release Germany’s Economic Sentiment Index for the next six months as well as the Current Situation Index in the EU session, reflecting the institutional investors’ opinions. The headline economic sentiment index is expected to drop to -20.0 in August versus -24.7 last while the current situation sub-index is also likely to ease to 72.3 versus 72.4 booked in July. Should the Euro area macro news better estimates, the EUR bulls could extend control, pushing the EUR/USD pair back above the 1.1450 mark. However, the spot could stall its recovery-mode and drop back below the 1.13645 level should the data disappoint.