EUR/USD sold-off at 1.1700 ahead of Ifo, Juncker-Trump trade talks
|- Treads water below 1.1700, as German Ifo surveys likely to disappoint.
- All eyes on Juncker-Trump meeting on trade issue for fresh dollar moves.
EUR/USD faced rejection once again just below the 1.17 handle in the Asian, as the bulls remain wary heading into the German Ifo business surveys and EU-US trade talks due later today.
EUR/USD: 1.1717/20 – A tough nut to crack
The spot fades a spike to 1.1698 highs and looks to retest the daily lows at 1.1679, in response to a fresh bout of buying seen around the US dollar against its major rivals. The USD index bounced-off lows near 94.50 and now prints session highs near 94.65 region, as 2-year Treasury yields gather some strength.
Despite the renewed weakness, the major remains confined within yesterday’s 60-pips trading range, as markets refrain from placing any directional bets on EUR/USD ahead of the all-important trade talks between the European Union (EU) President Juncker and the US President Trump.
Ahead of the meeting, Bloomberg reported that the EU seeks that Trump suspends tariffs in order to get a trade deal. Meanwhile, Trump called for a free trade deal with the EU late-Tuesday.
Calendar-wise, the focus remains on the German Ifo business climate surveys for fresh trading impetus on the Euro after yesterday’s strong German and Eurozone manufacturing PMIs. However, weaker-than-expected Euro-area services PMI readings left the common currency largely unimpressed, as the Eurozone composite PMI pointed to a GDP slowdown of 0.4%.
This week’s event risk remains the ECB policy decision due tomorrow, with markets expecting a long period of inaction until an ECB rate hike next summer.
EUR/USD Technical Levels
Valeria Bednarik, Chief Analyst at FXStreet, noted: “As for the technical picture of the EUR/USD pair, it continues meeting selling interest on attempts to break above the 1.1720 Fibonacci resistance, and lacking directional strength in the short term, as in the 4 hours chart, it continues to hover around a congestion of directionless moving averages. Technical indicators in the mentioned chart have turned south and entered the negative territory, although they lack strength enough to confirm additional declines ahead. At this point, the pair needs to break either above 1.1750, or below 1.1550 to gain some directional momentum, something quite unlikely for this Wednesday.
Support levels: 1.1650 1.1620 1.1590
Resistance levels: 1.1750 1.1790 1.1825.”
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