EUR/USD remains fragile, meets support at 1.1700
|- EUR/USD tests once again the 1.1700 area on Monday.
- Risk aversion prevails and sustains the dollar’s upside.
- The NAHB Index comes next in the US calendar.
EUR/USD now attempts a mild rebound to the 1.1710/15 band after bottoming out in the 1.1700 area earlier in the session on Monday.
EUR/USD: Door open to extra decline
EUR/USD loses ground for the third session in a row on Monday and intensifies the selloff to the 1.1700 neighbourhood, where some initial contention seems to have turned up so far.
The leg lower in the pair once again comes on the back of the intense rally in the buck, this time hitting fresh monthly highs near 93.50 when gauged by the US Dollar Index (DXY).
Also weighing on the pair aligns the increased risk aversion sentiment in response to heightened anxiety over China’s Evergrande crisis, which morphed into extra legs for the dollar and solid demand for US bonds, which rendered in lower yields.
In the daily calendar, Producer Prices in Germany rose 1.5% MoM and 12.0% YoY in August, surprising consensus to the upside. Across the Atlantic, the NAHB Index and a 3m/6m Bills Auctions are due later.
EUR/USD levels to watch
So far, spot is losing 0.08% at 1.1716 and faces the next up barrier at 1.1845 (weekly high Sep.14) followed by 1.1909 (monthly high Sep.3) and finally 1.1922 (100-day SMA). On the other hand, a break below 1.1700 (monthly low Sep.20) would target 1.1663 (2021 low Aug.20) en route to 1.1602 (monthly low November 4 2020).
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