Oversold Ahead of Consumer Data

The overall trend is bearish and there is a likelihood that the pair will drop to 1.0600.

Bullish View

• Buy the EUR/USD pair and set a take-profit at 1.0807.
• Add a stop-loss at 1.0650.
• Timeline: 1 day.

Bearish View

• Set a sell-stop at 1.0680 and a take-profit at 1.0600.
• Add a stop-loss at 1.0750.

The EUR/USD pair crashed to the lowest level since 2020 even after the strong victory by Emmanuel Macron and the positive business sentiment data in Germany. It is trading at 1.0715, which is about 13.32% below the highest level in 2021.

Advertisement

US Consumer Confidence Data Ahead

The euro continued its bearish trend as volatility in the financial market continued. The pair ignored the news from Germany and France. On Sunday, Macron had a decisive victory against Marine Le Pen, the right-wing leader. His victory means that status quo in France will continue in the coming years.

Another report came from Germany, where data showed that the country’s business confidence was doing well. According to Ifo Institute, confidence rose to 91.8 in April from the previous 90.8 in March. These results were significantly better than the median estimates of 90.8.

Confidence declined in the retail and construction sectors although it was offset by thev manufacturing sectors. Still, most companies in Germany are struggling with the ongoing inflation pressures.

The next key data to watch on Tuesday will be the latest American consumer confidence data by the Conference Board. Economists expect that confidence among consumers rose for the second straight month to 108. This will be a better confidence considering that inflation is still sticky.

The other important numbers to watch will be on the housing sector. The statistics agency will publish the latest new home sales numbers. Economists expect the data to show that new home sales fell slightly from 772k to 765k. The US will also publish the house price index data that will shed more color on the healthy of the sector.

Still, these numbers will not have a major impact on the pair considering that investors already expect that the Fed will continue hiking interest rates.

EUR/USD Forecast

The EUR/USD pair continued its bearish trend as the market volatility continued. On the four-hour chart, the pair moved below the important support level at 1.0807, which was the lowest level on March 7th. The Bollinger Bands have widened while the MACD has moved below the neutral level while the Stochastic oscillator has dropped to the oversold level.

Therefore, the overall trend is bearish and there is a likelihood that the pair will drop to 1.0600. However, the most likely scenario for Tuesday is where it stages a relief rally and retests the resistance at 1.0807.