EUR/USD Analysis: USD weakness persists, EUR unable to take advantage of it
|EUR/USD Current price: 1.1672
- Despite recovering on risk aversion, the USD remains close to its recent lows across the board.
- US housing data came in mixed, having no effect on the EUR/USD.
The USD remained under pressure through the Asian session and at the beginning of the European one, but the EUR/USD pair was unable to leave its early week range. The pair hit a daily high of 1.1714 but quickly retreated to its comfort zone around 1.1680. The American currency found some demand on a risk-averse headline, indicating that the UK PM May was said to reject Barnier's proposal on the Irish border issue. The EU released July´s Current Account, which recorded a surplus of €21.3 billion, compared with a surplus of €23.8 billion in June and Construction Output for the same month, which beat expectations, up by 0.3% MoM and 2.6% YoY.
The pair is little changed ahead of Wall Street's opening, and following the release of mixed US Housing data. In August, Housing Starts grew by 9.2% largely surpassing the expected 5.8%, while Building Permits plunged 5.7% vs. an expected decline of 0.1%. Draghi is set to speak shortly but seems unlikely he will offer fresh hints on monetary policy.
The EUR/USD pair, in the meantime, offers a neutral short-term technical stance, hovering right above a directionless 20 SMA, while technical indicators also lack directional strength slightly above their midlines. In the same chart, the pair keeps holding above the 1.1620/30 support, where it has the 100 SMA and the 23.6% retracement of its August rally. Below this area, the risk of a downward continuation will increase, while the bullish potential will be higher on a decisive break above 1.1733, August high.
Support levels: 1.1625 1.1590 1.1550
Resistance levels: 1.1735 1.1760 1.1800
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