The Eurozone economy expanded only slightly.

The euro remained stable at approximately 0.91 euros per U.S. dollar, despite the European Central Bank (ECB) cutting interest rates by 0.25 basis points (bps) in June. Investors continue to worry that the ECB might aggressively cut interest rates, with a 25% chance that the ECB will reduce rates by another 50 bps at the September 18 meeting. On the U.S. economic front, weaker-than-expected employment figures for July have led to expectations that the Federal Reserve might further reduce interest rates. However, strong U.S. retail sales data have helped alleviate concerns about a severe economic downturn.

The Eurozone's GDP grew by 0.3% in the second quarter of 2024, driven by the expansion of key economies such as France, Italy, and Spain. Meanwhile, Germany, the largest economy in the region, saw a contraction of 0.1% due to a slowdown in industrial sector growth and tensions arising from high-interest rates. Year-on-year, the Eurozone's GDP grew by 0.6%, marking the highest growth in five quarters. European Central Bank policymakers expect the Eurozone economy to grow by 0.8% this year, following a period in which the economy risked entering a technical recession.

The Economic Sentiment Index (ESI) for the Eurozone continued to decline in August, dropping 25.8 points to a nine-month low of 17.9. This marks the second consecutive month of decline, amid uncertainty regarding the economic outlook and the direction of monetary policy in August. Additionally, rising household essential expenses and production costs have further worsened the economic outlook for the near future. However, analysts predict only a slight downturn in economic activity.

Inflation in the Eurozone rose again to 2.6% in July, up from 2.5% in June. The market had forecasted a slowdown to 2.4%, but rising energy costs impacted various industrial sectors. The cost of other non-energy industrial goods also increased. However, inflation in the service sector slowed slightly, with food and beverage prices dropping to 2.3%. Core inflation, excluding food and energy prices, remained stable at 2.9%, posing a risk if the ECB eases monetary policy too quickly.

The Eurozone's services PMI fell to 51.9 in July, marking the slowest expansion rate in the services sector since March, due to slower growth in new business, primarily impacted by weakened domestic demand. However, stronger foreign demand provided some support. The slowdown in demand has led companies to delay hiring to reduce production costs as much as possible.

Techical analysis data (5H)

Resistance: 0.9106, 0.9115, 0.9121

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 0.9085 - 0.909 but cannot break the support at 0.909, you may set a TP at approximately 0.9115 and SL at around 0.9075 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 0.9106 - 0.9115, you may set a TP at approximately 0.9121 and SL at around 0.9085 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 0.9106 - 0.9115 but cannot break the resistance at 0.9106, you may set a TP at approximately 0.9085 and SL at around 0.9121 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 0.9085 - 0.909, you may set a TP at approximately 0.9075 and SL at around 0.9115 or according to your acceptable risk.

Pivot point August 16, 2024 09:13 PM. GMT+7