Fundamental analysis of EUR/USD

EUR/USD is recovering to levels lost due to unexpected news about bank taxes in Italy and is trading at 1.09800. The decline was influenced by trade data from China and weak inflation data from Germany. 
There are currently no important Eurozone economic indicators that could shift the focus. German data showed that the harmonized consumer price index matched market expectations at 6.5%. The euro's position remains somewhat fragile due to ongoing speculation surrounding the European Central Bank's upcoming interest rate decisions. 
 

As for the U.S., Moody's recently downgraded the credit ratings of some small and medium-sized U.S. banks and also warned of the possibility of downgrades for large organizations. The move underscores growing fears that rising interest rates could trigger a recession, especially in the face of a pandemic. Meanwhile, U.S. trade data showed a slow economic recovery and falling global demand. Statistics on the U.S. trade deficit for June show a decline, but the numbers are still worrisome. Investors clearly see the outlook in the US inflation data, as any lower than expected figures could limit the upside potential of the US Dollar, which would indirectly favor the US Dollar.
 
At the same time, as no important economic data from the Eurozone is expected, the rally in the dollar will largely determine the movement of the EUR/USD pair. Investors are watching the upcoming US CPI and PPI for July, which will be released later this week. The trajectory of the EUR/USD pair will also depend on the market's risk sentiment and any potential announcements from central banks. Notably, no speech from the ECB executive board members is expected, but investors should keep an eye on any impromptu ECB-related news. 
  
Technical Analysis and Scenarios:

The current price of EUR/USD is at 1.09800. The price is near the middle Bollinger Bands band, suggesting a possible consolidation or preparation for a breakout. Considering the location of Stoch(5,3,3) - the value (61.3222) is above the signal value (44.5941) - we can conclude about the bullish momentum. The price being near the middle band of the upward Bollinger Bands and the narrowing of the range also indicates the possibility of a bullish breakout. However, MACD(12,26,9) is currently in the bearish zone with its value (-0.000436) below the signal value (-0.000162). This warns of a potential bearish undertone and the possibility of a pullback or consolidation in the coming days.
Main scenario (BUY)
Recommended entry level : 1.10690.
Take Profit: 1.11400.
Stop Loss: 1.10200. 
Alternative scenario (SELL)
Recommended entry level: 1.09000.
Take profit: 1.08140.
Stop loss: 1.09500.