The single European currency has seen mild losses on Wednesday morning, April 22 after Tuesday’s volatile session. Notably, President Donald Trump said in a speech that 20 states mull reopening businesses in the near term.
On Tuesday, during the first half of Tuesday EUR/USD moved lower towards the 1.0820-1.0825 range, but after lunch the euro bulls erased all earlier losses as the pair reached 1.0880. However, near the close the euro bears managed to regain the initiative. As a result, the pair closed in negative territory.
As regards the key macro data, Germany’s ZEW Current Conditions Index and Economic Expectations Index came out yesterday. The former came in at -91.5 in April, down from -43.1 in March, while the latter for the same period reached 28.2 compared with -49.5 a month earlier. Analysts projected the indexes at -77.5 and -42.3, respectively.
Stateside, existing home sales totaled 5.27 mn in March, while analysts forecast 5.3 mn. Meanwhile, the February reading was revised down from 5.77 mn to 5.76 mn. The report showed that March experienced the biggest monthly decline in sales since November 2015. The median home price in March jumped 8% to USD 280,600, with the home price rising for 97 consecutive months. In addition, given the current pace of sales it would take 3.4 months to clear unsold inventory.
Today investors are advised to watch for the Eurozone CCI. We expect the reading to reach -19.6 in March. No market-driving macro data will come out stateside today, nor are FOMC speeches expected due to the one-week quiet period ahead of the Fed’s monetary policy meeting.
A symmetrical triangle is shaping up in the EUR/USD 4-hour chart, with the upper bound at 1.0905 and the lower bound at 1.0825. Stochastic lines are on the buy side but will soon reach overbought territory, so we expect the pair to test the lower line of the pattern.