EUR/USD focuses on 1.0100 in advance of German ZEW data

EUR/USD is aiming to continue its two-day bearish momentum on Tuesday, with bears targeting the 1.0100 demand zone amid a risk-averse market environment. Despite Wall Street's surge on the back of a predilection for growth stocks, Asian markets look wary as recent Chinese data inflicted pain and stoked global recessionary fears.

The diminished interest for riskier assets maintains the bullish sentiment surrounding the safe-haven US dollar notwithstanding the persistent decline in Treasury yields. At the time of writing, the US dollar index is unchanged at approximately 106.55, while benchmark 10-year interest rates are down approximately 0.50% to 2.775%.

The market's focus has shifted to persistent recession fears, as investors remain concerned about the magnitude of expected Fed rate hikes in the wake of weaker U.S. inflation statistics. The minutes of the Federal Reserve's July meeting will be keenly scrutinized for signs about the central bank's future course of action.

Ahead of that, the ZEW poll from the Eurozone and Germany will be scrutinized, as it may confirm a recession on the old continent amidst the intensifying energy and supply-side crises. The evaporation of the Rhine River has compounded the euro's woes.

The German headline Economic Sentiment is anticipated to improve to -52.7 in August from -53.8 in July, while that of the Eurozone is anticipated to decline to -42.5 from 51.1. In the meanwhile, investors will await US housing statistics for updated dollar valuations.

Technically, EUR/USD closed below the important short-term 21-day moving average (DMA) around 1.0210 on Monday, laying the groundwork for more losses. The Relative Strength Index (RSI) for the past 14 days is hovering below the 50 level, indicating bearish potential. On the way to 1.0100, sellers are likely to test the August 3 low of 1.0122.