EUR/USD treads water in familiar chart territory ahead of thin Wednesday

• EUR/USD churns near 1.0720 as market flows buckle down for the wait to key data.
• Wednesday has a limited data docket on the offer.
• Investors look ahead to Friday’s packed data docket.

EUR/USD traded within familiar levels on Wednesday, keeping the Fiber trapped in near-term  consolidation just north of 1.0700 as Euro traders hunker down for the wait to meaningful data releases. Momentum is set to remain thin as markets await fresh data to drive market flows beginning on Thursday.

Forex Today: The FX universe remains in waiting mode

Wednesday’s economic calendar is notably thin, though traders will note that the latest German GfK Consumer Confidence Survey for July is expected to improve slightly from the previous print of -20.9 to -18.9. European Central Bank (ECB) Chief Economist Philip Lane is also expected to deliver some talking points during the European market session. Still, the ECB Executive Board member is not expected to rock the boat or otherwise deviate from recent talking points shared by other ECB board members.

The US will also release the latest Bank Stress Test results, but performance is not expected to wildly deviate from previous runs through the Federal Reserve’s stress test of the US banking system. The current “severely adverse” stress test asks banks to examine the soundness of their balance sheets under a hypothetical scenario where the US Unemployment Rate reaches 10% within a two-year period, alongside an increase in market volatility, a 36% decline in housing prices, and a 40% drop in commercial real estate values.

Thursday will kick off the week’s data releases in earnest, with final pan-EU Consumer Confidence figures for June as well as a revision print for Q1’s US Gross Domestic Product (GDP) print which is expected to hold steady at 1.3% QoQ.

Friday will blow the doors off the week’s otherwise sedate economic release schedule with German Retail Sales figures for May and the latest print of US Personal Consumption Expenditure Price Index (PCE) inflation, also for the monthly period of May. One of the Federal Reserve's (Fed) preferred inflation metrics, investors will be closely monitoring a continued decrease in crucial US inflation figures to ensure the Fed stays on track to implement an initial rate cut when the Federal Open Market Committee (FOMC) convenes on September 18.

EUR/USD technical outlook

EUR/USD continues to get squeezed into near-term consolidation as the 200-hour Exponential Moving Average (EMA) weighs on intraday price action from 1.071, but a demand zone below 1.0680 is proving technical support and keeping bids bolstered.

Daily candlesticks are mired in technical congestion, but the Fiber remains poised for an extended slide as high and lows continue to chalk in lower peaks and valleys. The pair is drifting on the south side of the 200-day EMA at 1.0798, and failure to spark a firm bullish push back into the high end of recent lower highs could see the Fiber contesting the last major swing low into the 1.0600 handle.

EUR/USD hourly chart

EUR/USD daily chart