During Tuesday's Asian trading session, the EUR/USD currency pair failed to extend its previous day bullish moves and dropped below the 1.1300 level. The bearish trend of the EUR/USD was caused by the losses in the U.S. stock futures triggered by the heightened concerns of coronavirus. On the other hand, the currency pair traders did not give any major attention to the below forecasts German industrial figures. At this moment, the EUR/USD currency pair is currently trading at 1.1292 and consolidating in the range between 1.1292 and 1.1333. It should be noted that the Industrial Production in Germany recovered less-than-expected in May, as per the official data released on the day. As well as, this data suggested that the manufacturing sector in Europe's largest economy was gradually recovering from the lockdown-imposed slump.
The IFO institute said its production index climbed to 4.3 points in June from -19.5 in May, marked the second-biggest increase since German reunification, three decades ago. While introducing Industrial Production, this data is normally released by the Statistisches Bundesamt Deutschland, which measures the German factories and mines; however, any changes in industrial production are seen as a major indicator of strength in the manufacturing sector. As a result, a high reading is considered positive (or bullish) for the shared currency. Likewise, the low reading is seen as negative (or bearish). The currency pair was strongly bid near 1.1330 early on the day, as the futures tied to the S&P 500 were extending Monday's upbeat sentiment on Wall Street with 0.30% gains.
Afterward, the bid tone around the S&P 500 futures declined as the ever-increasing number of cases overshadowed the previous release of positive data from the U.S. and China. Whereas, the total number of U.S. cases, crossed 2.9 million figures while the number of deaths was reported as 130,000 yesterday.
This eventually dampened investor sentiment globally and exerted downside pressure on the risk sentiment and provided support to the safe-haven assets. As per the latest report, Texas cases rose 2.7% v 7-Day Avg. 4.0%, while Texas hospitalizations rose 517 to record 8,698. In the meantime, Florida cases rose 3.2% v 7-Day Avg. 5.1% and California cases rose by record 11,529. However, the intensified concerns over a second economic lockdown in the U.S. caused risk-off flows to continue to dominate the trading markets.
The S&P 500 futures were reporting a 0.20% loss and could face further losses if the Chinese stock markets turned red in response to comments by China's state media that traders need to be rational. The risk sentiment was mildly supported by the reports that the stocks in China rose after hints of further stimulus and positive response about the virus vaccine. It should be noted that the Shanghai Composite Index jumped over 5.5% on Monday after the state media said the bull market was recently more important than ever. As well as, the hopes of a sharp V-shaped global economic recovery might keep a lid on any additional losses in the financial market.
At the USD front, the broad-based U.S. dollar gained some positive traction on the day and rose sharply from the session's low mainly due to renewed safe-haven demand on fears of the second wave as coronavirus cases continued to mount. However, the upticks in the U.S. dollar played a key role in keeping the currency pair lower. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.04% to 96.718 by 12:34 AM ET (5:34 AM GMT).
Daily Support and Resistance
Pivot Point 1.1312
Looking forward, the market traders will keep their eyes on the trade/virus updates for near-term direction. In the absence of any major data/event, the global markets may witness a dull trading session ahead. The EUR/USD is stuck below the triple top resistance level of 1.1342, which can be seen on the 4-hour timeframe. On the lower side, the support stays at 1.1303 level today. An upward breakout of 1.1342 mark can initiate a bullish trend unto 1.1395, while a downward breakout of 1.1306 can open further room for selling until 1.1223 level today. Good luck!