EUR/USD analysis: USD leads the way
|EUR/USD Current price: 1.1715
- US Fed's Powell to testify before the Senate Banking Committee this Tuesday.
- Majors directionless as investors maintains a cautious stance.
Trading was quite erratic across the financial world at the beginning of the day, with the dollar lower against all of its major rivals, to later recover as US Treasury yields advanced firmly for the first time in nearly two weeks. The EUR/USD pair tested a daily high of 1.1725 in the European session, holding between such high and the 1.1700 for the rest of the day. There were some relevant macroeconomic news coming from both shores of the Atlantic, although they had little saying on price action. In the EU, the goods trade balance surplus shrunk in May to €16.5B amid a fall in exports combined with an increase in imports. The US released June retail sales, which were up by 0.5% as expected, while the control group reading remained pat. On a positive note, May's readings were revised higher, offsetting the poor headlines, while the NY Empire State Manufacturing Index came in at 22.6, better than the 22.0 expected.
This Tuesday, market's attention will center on Fed's Powell testimony before the Senate Banking Committee and any clue he can give of future monetary policy decisions. The EU won't publish macro news, while the US will release June Industrial production and Capacity Utilization expected better than May's numbers.
Technically, the pair met sellers at around the 23.6% retracement of the April/May's decline, which has proved strong in the past and despite the modest intraday advance, it maintains a neutral technical stance, given that in the 4 hours chart, the pair is developing a handful of pips above a congestion of moving averages, which reflects the absence of a clear directional strength, while technical indicators eased within positive territory, reflecting limited buying interest. The downside potential seems also limited, at least as long as the pair holds above the 1.1660 static support.
Support levels: 1.1660 1.1620 1.1580
Resistance levels: 1.1720 1.1755 1.1790
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