Eurozone Data: Inflation and Sentiment
Italy CPI (Jul): +0.4% m/m; +1.7% y/y (in line with estimates).
Germany CPI (Jul): 0.0% → +0.3% m/m; steady at +2.0% y/y; HICP eased from +2.0% to +1.8%. The combination supports expectations that the ECB may extend its pause in the dovish cycle, while keeping optionality into the autumn.
ZEW (Aug, Germany): current conditions fell from −59.5 to −68.6; expectations dropped from 52.7 to 34.7. ZEW President Achim Wambach noted disappointment with the EU–U.S. trade deal. Growth prospects weakened most in chemicals and pharmaceuticals, with softness also in engineering, metals, and autos. Persistent pressure could nudge the ECB toward a rate move later this fall.
U.S. Dollar & Fed Pricing
The dollar index (USDX ~97.80) steadied after July CPI showed headline inflation at 2.7% y/y (vs. 2.8% expected), while core CPI ticked up from 2.9% to 3.1%. Markets largely faded the core surprise—food and energy are excluded—keeping conviction high for a September Fed cut. CME FedWatch places the odds above 93%.
Technical Picture: EUR/USD
On the daily chart, price is pressing toward the upper line of a rising channel bounded by 1.2050–1.1480.
- Alligator (EMAs): fast lines sit around the signal line as the range narrows—an early buy setup forming.
- AO (Awesome Oscillator): corrective green bars are building from the sell zone, hinting at momentum rotation.
Resistance
- 1.1760
- 1.1970
Support
- 1.1590
- 1.1400
Trade Setups
Primary
Buy stop on a break and daily close above 1.1760, targeting 1.1970. Stop-loss: 1.1700. Holding period: 7+ days.
Alternative
Sell stop on a break and daily close below 1.1590, targeting 1.1400. Stop-loss: around 1.1600.
| Timeframe | Recommendation | Entry | Take Profit | Stop Loss | Key Levels |
|---|---|---|---|---|---|
| Weekly | BUY STOP | 1.1760 | 1.1970 | 1.1700 | 1.1400, 1.1590, 1.1760, 1.1970 |
| Weekly (Alt.) | SELL STOP | 1.1590 | 1.1400 | 1.1600 | 1.1400, 1.1590, 1.1760, 1.1970 |