Fundamental analysis of EUR/USD

The EUR/USD pair is recovering from last week's late week's drop influenced by the US PPI data for July and is trading at 1.09510. 
 This drop underscores the market's bias towards the US Dollar, even amid favorable news from Italy. Italian Prime Minister Giorgia Meloni eased somewhat as he averted further problems for banks following the introduction of a one-off 40% tax. However, worries about a possible debt crisis in China, as well as concerns about a looming recession in the Eurozone, especially as US Treasury yields rise, put downward pressure on EUR/USD. Another important factor affecting the pair's value is the wholesale prices from Germany. Their dynamics is an important indicator of consumer price inflation: an upward trend indicates the growth of inflationary pressure from consumers, while a negative trend indicates a decline in demand. Notably, weak demand has led to a decline in wholesale and producer prices, with wholesale prices expected to fall to an annualized rate of 2.5% in July. This is small but an improvement from June's 2.9% decline. Although the European economic calendar is not too bright, any commentary from the ECB could attract investors' attention. However, as ECB board members are not scheduled to speak today, any significant changes are likely to be driven by media commentary. 
On the US side, there will likely be no economic data today, attention will turn to any Fed announcement, especially given the likelihood of a 25 basis point rate hike of 10.0% in September. The suspension of bond trading by China's Country Garden and the failure to process payments by its subsidiary Zhongzhi Enterprise Group, has heightened concerns about China's debt. International tensions, such as the escalation in the Russia-Ukraine conflict and the US-China trade dispute, have only increased risk aversion, putting additional pressure on EUR/USD. With the 10-year US Treasury bond yield at around 4.17% and relatively stable maturities on the block, EUR/USD traders remain cautious, especially given the Treasury meeting minutes. 
Combined with the ECB's monthly economic report, which highlighted general macroeconomic uncertainty, this has kept the EUR bearish. The general risk aversion will maintain a bearish outlook for sellers.
Technical analysis and scenarios:

EUR/USD is currently at 1.09510, which is near one of the major support levels at 1.09000. The Stochastic oscillator indicates that the pair may be oversold, with a value of 14.2079 (usually an oversold value below 20 is considered oversold). The signal line at 6.7161 confirms this interpretation. The Bollinger Bands show that the price is rising in the lower range as it approaches the middle band. The MACD value below the signal value suggests bearish momentum, although the difference between the two is minimal, indicating potentially weak momentum. Given the bearish MACD reading and if negative external factors play a more significant role, the pair could break below the support at 1.09000, targeting the next support at 1.08140.
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.