Fundamental analysis of EUR/USD

The EUR/USD pair declined and is trading at 1.09850. The decline was influenced by weak data on industrial production in Germany. 
 
Investors' concerns about a possible recession in the eurozone combined with expectations of inflation data in the U.S. contribute to limiting growth. The publication of the ECB consumer expectations survey results for June is crucial, as this data reflects the state of the eurozone economy. In particular, any decline in consumer sentiment is a potential bearish sign. The services sector clearly remains the mainstay of economic activity in the eurozone. The economic situation in the eurozone remains challenging. The latest German industrial production data confirmed these fears: it fell by 1.5% month-on-month in June. Meanwhile, sentiment around the euro has intensified amid speculation over the European Central Bank's interest rate. 
 
Ahead of the European markets opening, the tone was set by trade data from China, which showed a sharper-than-expected decline. Exports fell 14.5% in July compared to June's 12.4% decline, while imports fell 12.4%. 
On the other side of the Atlantic, the US dollar gained attention after a hawkish statement from Atlanta Fed chief Michelle Bowman hinted at the possibility of a rate hike to address inflation. Such moves could lead to further strengthening of the US dollar, depriving the EUR/USD pair of upside potential. Later in the day, the main focus will be on US trade data, but these figures will have a limited impact on the Federal Reserve's stance and therefore on the USD exchange rate. The US trade-to-GDP ratio, which will be 25.48% in 2021, is not a primary concern for the Fed. However, investors should keep an eye on possible announcements by FOMC members Barkin and Harker. 
  
During the week, market attention will be focused on the harmonized German CPI for July and the US CPI, which will be released on Thursday and could determine the direction of the EUR/USD pair.
  
Technical analysis and scenarios:

The Stochastic oscillator indicates a possible decline as its value (49.2664) has fallen below the signal level (61.5948). This is usually a bearish sign indicating a possible slowdown in momentum. Bollinger Bands: Price is declining in the upper band range: the upper band is at 1.10360, the middle band is at 1.09740 and the lower band is at 1.09150. The bands are widening and pointing upwards, which may indicate increased volatility. The MACD value is currently above its signal, indicating bullish momentum. However, the difference between the value and the signal is quite small, indicating that the momentum may not be very strong.
Main scenario (SELL)
Recommended entry level: 1.09000.
Take Profit: 1.08140.
Stop Loss: 1.09500.
Alternative scenario (BUY)
Recommended entry level: 1.10690.
Take Profit: 1.11400.
Stop loss: 1.10200.