EUR/USD modestly recovers from daily lows, remains below 1.18

The EUR/USD pair tumbled to a fresh daily low at 1.1738 in the first half of the NA session and started to consolidate its daily losses in the last couple of hours. At the moment, the pair was trading at 1.1770, losing 0.22% on the day.

After closing the day below the 1.18 mark on Monday, the pair pushed lower during the European trading hours after the data from the euro area couldn't help the shared currency stage a recovery against the greenback. The annual inflation measured by the CPI in the eurozone remained unchanged at 1.5% in September. However, the EU Economic Sentiment Index published by the ZEW plummeted to 26.7 in October from 31.7.

Following the dismal data, the EUR/USD pair eased to mid-1.17s and moved sideways around that level ahead of the macroeconomic data releases from the United States. According to the U.S. Bureau of Labor Statistics, import prices increased 0.7% in September on a monthly basis, bettering the market expectation of 0.5%, while the industrial production, which contracted by 0.7% in August, rebounded to 0.3% in September. Boosted by the upbeat data, the US Dollar Index advanced to its best level in eight days at 93.60, pushing the pair lower.

With no more data left in the remainder of the session, the pair is likely to move sideways around its recent levels. On Wednesday, the economic calendar won't be featuring any significant data that could impact the price action and the DXY is likely to drive the price action.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, writes, "...in the 4 hours chart, the price is accelerating below its moving averages, whilst technical indicators gain further downward momentum within bearish territory. The pair faces its next short-term support at 1.1720, with a break below the level opening doors for additional declines towards the 1.1660 region, where the pair bottomed in August and September."

According to the analyst, supports could be seen at 1.1720, 1.1660 and 1.1620 while resistances align at 1.1790, 1.1830 and 1.1865.  

Today's data from the U.S.

• US: Builder Confidence rises four points in October - NAHB
• US: Industrial production rose 0.3 percent in September
• US: Import prices rise 0.7% in Sept on higher fuel prices; export prices increase 0.8%