EUR/USD: Bear’s return eyes 1.1700 ahead of US Durable Goods Orders
|- EUR/USD snaps three-day uptrend, pressured near intraday low of late.
- US dollar tracks firmer Treasury yields amid indecision over Fed’s tapering, covid woes.
- German IFO number, US Durable Goods Orders will decorate the calendar but Powell’s Jackson Hole Symposium speech is the key.
EUR/USD holds lower ground near intraday low after snapping a three-day run-up during early Wednesday. That said, the currency-major pair drops 0.15% on a day surrounding 1.1730 heading into the European session.
The covid woes and fading vaccine optimism, as well as cautious mood ahead of the Jackson Hole Symposium event, underpin the US dollar’s safe-haven demand.
With this, the US Dollar Index (DXY) rises 0.17% daily to take a U-turn from the weekly low, not to forget marking the first positive day in the last four. In doing so, the greenback gauge follows the US 10-year Treasury yields, as the bond coupon stays firmer around 1.30% after rising the most in two weeks the previous day.
French covid hospitalizations jumped to a two-month high while Germany dropped incidence levels as key COVID-19 yardstick as the virus spreads inside the bloc. Additionally, Italy reports a jump in the daily virus-led deaths to 60 on Tuesday. It’s worth noting that the US Health Official Dr. Anthony Fauci’s expectations to get the COVID-19 under control during early 2022, provided faster jabbing, even the world’s largest economy battles multi-day high death tolls and rising infections at home.
Read: Investors suspect coronavirus apex in US and China
On Tuesday, softer US Richmond Fed Manufacturing Index data for August, 9 versus 25 expected, joined the first rise in the New Home Sales in four months and upbeat German GDP to weigh on the EUR/USD prices the previous day, amid risk-on mood. However, the mixed data currently looks to the US Durable Goods Orders for July, forecast -0.3% versus +0.9% prior, for further firming up odds favoring the need for easy money policies.
Read: Durable Goods Orders Preview: The trigger for a greenback comeback?
For an immediate direction, the German IFO sentiment figure for August could also help the EUR/USD traders after the previous day’s firmer GDP data from the bloc’s largest economy back the bulls. Above all, Fed Chair Jerome Powell’s speech the Jackson Hole becomes the key event of the week.
Technical analysis
Despite the recent pullback, EUR/USD keeps Tuesday’s break of the falling wedge bullish formation’s resistance line amid bullish MACD, which in turn keeps the buyers hopeful of crossing 20-DMA resistance near 1.1775 unless the quote drops back below 1.1715.
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