EUR/USD is Likely to Test the Nearest Support at 1.0910
A declining German CPI (consumer price index) is giving a chance for the single currency to test its 1.0910-1.0940 support area. Technically, it corresponds to August 2-4. The data released on Tuesday shows inflation in the EU leading economy slowed from 6.4% to 6.2%. Combined with fresh post-pandemic lows in manufacturing activity, this could be one more reason for the European Central Bank to make a pause decision. The difference in borrowing costs nominated in U.S. Dollars and Euros is favouring some moderate and rather temporary weakness in EUR/USD. Yet, the moment could be used by short-term speculators. Stop loss orders for intraday sell positions are needed to be placed properly, just several points above the 1.1050 local resistance. The whole picture and the current sentiment on foreign exchange market may change its direction when the time will come too close to the rival U.S. CPI release. It is scheduled for August 10, carrying additional risk to currency traders. This is why any current positions are only tactical, not a strategy.
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