EUR/USD analysis: bears to take over below 1.1200
EUR/USD Current Price: 1.1215
- EUR/USD at risk of extending its decline ahead of the Fed's decision.
- US data came in below the market's expectations, preventing the greenback from appreciating.
The EUR/USD pair edged higher Monday, although the advance was quite limited with action restricted throughout the forex board ahead of the Fed's decision later this week. The American dollar started the week advancing against most major rivals, although its strength faded as the day went by, ending it in an uneven fashion against its major rivals. The EUR/USD pair surged to 1.1246, retreating from such a high ahead of the close. The greenback held near its recent highs, as the latest US consumer-related data suggested that the economy remains resilient, generating doubts about how dovish the Fed could be when policymakers meet this week. Across the Atlantic, ECB´s Benoit Coeure warned of “bleak” indicators about the health of the global economy, and that risks could materialize in the next few meetings.
In the data front, the EU published Q1 Labour Cost, which rose by less-than-anticipated, up by 2.4% vs. the 2.6% forecasted. In the US, the NY Empire State Manufacturing Index for June, disappointed with -8.6 in June vs. the previous 17.8 and the expected 10.0, while the NAHB Housing Market Index for the same month resulted at 64 vs. the expected 67. Dismal US data prevented the greenback from appreciating alongside uncertainty about the Fed's stance. This Tuesday, the macroeconomic calendar will include a speech from ECB's Draghi, the German ZEW survey for June and EU's final May inflation. The US, on the other hand, will release May Housing Starts and Building Permits.
From a technical point of view, the EUR/USD pair is still at risk of falling, as it trimmed intraday gains ahead of the close, now trying to stabilize at around 1.1200. In the 4 hours chart, the pair is trading between the 61.8% and the 50% retracements of its latest daily advance, with the most relevant being at 1.1200, providing a strong static support. Technical indicators in the mentioned chart have moved away from there lows, but remain well into negative ground, keeping the risk skewed to the downside.
Support levels: 1.1200 1.1170 1.1120
Resistance levels: 1.1265 1.1310 1.1350
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
