EUR/USD bounces-off 6-month lows near 1.1720
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- Pressured by relentless US dollar rise and Italian politics, but manages to keep 1.1700.
- Holiday-thinned trading could exaggerate the moves, as focus shifts to the Fedspeaks.
The EUR/USD pair extended its losing streak into a sixth day today and hit fresh six-month lows at 1.1717 last hour, before recovering some ground to now trade near 1.1740 levels.
Despite the latest upturn, the spot remains exposed to downside risks, as the US dollar remains broadly underpinned by fading tensions over the US-China trade war after the officials from both the US and China agreed over the weekend to suspend the tariff threats. The USD index climbed to 94.05, the highest levels since December 2017.
More so, the bearish bias seen around the major can be also attributed to the Italian political risks that continue to weigh down on the Euro, as markets remain skeptical of the Italian new coalition government’s intentions to remain in the Eurozone. Also, the latest cautious remarks delivered by the ECB policymaker Nowotny on Italy’s political scenario add to the weight on the common currency.
In the day ahead, the focus remains on the speeches by the FOMC members Bostic, Harker and Kashkari for fresh dollar trades ahead of Wednesday’s FOMC meeting minutes release.
EUR/USD Technical Levels
Haresh Menghani, Analyst at FXStreet, notes, “Below the 1.1745-40 region, the pair is likely to slide towards testing the 1.1700 handle, marking 38.2% Fibonacci retracement level of the 1.0341-1.2556 upsurge. However, with near-term oversold conditions, as depicted by daily RSI, bears are likely to take some breather near the mentioned support. On the flip side, any meaningful recovery attempt is likely to face some fresh supply near the 1.1800 round figure mark, above which a bout of short-covering could lift the pair further towards the 1.1840-50 resistance.”
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