EUR/USD analysis: dollar eases but remains the strongest

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1684

ECB's monetary policy Accounts cooled down hopes for a sooner rate hike.
US June inflation matched market's expectations, remained above 2.0%.

The EUR/USD pair fell to a fresh weekly low of 1.1649 but managed to recover some ground afterward, unable, anyway, to move past 1.1700. The sour sentiment that dominated markets in the previous days was reversed, with equities rising in all the major markets, with safe-havens' yen and CHF plummeting to multi-month lows against the greenback. The ECB released the Minutes of its latest meeting, which reiterated the dovish tone offered by Draghi in the press conference following the latest decision, without shedding new light over a possible date for an upcoming rate hike. In the data front, Germany released June inflation figures, which matched market's expectations, up 2.1% YoY, while the U offered May Industrial Production figures, up by a solid 1.3% from the previous month, and 2.4% from a year earlier. In the US, June inflation was up 0.1% in the month, slightly below the 0.2% increase expected, although the core readings, excluding food & energy, met market's forecast by rising 0.2% MoM and 2.9% YoY.

This Friday, Germany will publish Wholesale Price index for June, a minor report, while the US will offer the July preliminary Michigan Consumer Sentiment Index, expected at 98.2, and the semiannual Fed Monetary Policy Report.

Despite closing lower against all of its major rivals, the greenback remains the strongest currency across the board, with the ongoing retracement considered just corrective. The pair's 4 hours chart shows that technical indicators remain in negative territory, with the RSI flat at 45, while the price flirted with directionless 100 and 200 SMA to find some stability right above the indicators, but is also now below a bearish 20 SMA, and the 1.1720 Fibonacci resistance, all of which leans the risk toward the downside. Renewed selling interest below the 1.1660 level could result in a test of 1.1590 should investors resume dollar's buying.

Support levels: 1.1660 1.1620 1.1580

Resistance levels: 1.1720 1.1755 1.1790

View Live Chart for the EUR/USD

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.

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