Conflicting Fundamentals Influencing Forex Market

The recent EUR/USD bull trend stalled overnight - see Chart.

Two conflicting fundamental influences seem to be in play at present. In the last six months, more stable market conditions have helped fuel a rebound. However, the speed of the recovery seems dependent on interest rate hikes which are unlikely in the near future.

In Forex terms, this effect is shown on the EUR/USD where the new bull trend is competing with a stalling top backed by a Stochastic bear crossover.

Earlier this morning, French Industrial Production posted a drop to 0.1% versus 0.7% expected whilst the Italian 2Q GDP registered -0.5%.

Also, the BOE left its rate unchanged at 0.5% and did not add to its Asset Purchase Program.

Major event risks occur today at 8.30am EST with the releases of the US Initial Jobless Claims and Continuous Claims forecasted at 560k and 6200K respectively.

Intraday, the Stochastic effect should prevail resulting in the EUR/USD testing supports at 1.4500 and 1.4460. If, however, the trend can resume, then the resistance at 1.4600 will be pressured.