EUR/USD analysis: market's not ready to buy the greenback
EUR/USD Current price: 1.1742
The EUR/USD pair peaked at 1.1789 in Asia, following the positive momentum triggered by a dovish FOMC and Trump advisors´ jitters, but was unable to hold on to gains, after London's opening, and despite some generally encouraging news coming from the EU. According to final revisions, the region's inflation remained at 1.3% for the year, falling MoM 0.5% as expected. Also, the euro area recorded a €26.6B surplus in trade in goods with the rest of the world in June 2017. The release of the Minutes of the latest ECB meeting put the common currency under further pressure, as they showed concerns over the strength of the local currency, fearing a possible overshooting of its value, which will result in delaying rising inflationary pressures. The minutes, didn't include hints on normalization, resulting in the pair plunging to a fresh August low of 1.1661. The pair later recover, as the dollar lost is charm on rumors indicating that Gary Cohn, the US Director of the National Economic Council, was resigning, but were later denied.
The EUR/USD pair trimmed most of its daily losses but maintains a negative bias short term, given that in the 4 hours chart, the American afternoon´s recovery was contained by a bearish 20 SMA, whilst technical indicators are unable to re-enter positive territory. The dollar is far from strong, but the ongoing slide may continue mostly due to bulls giving up after the pair faltered once again to regain the 1.1800 while it keeps on posting lower lows. Renewed selling interest below 1.1685 should lead to another leg lower, still eyeing a test of the daily ascendant trend line coming from April's low, now around 1.1580.
Support levels: 1.1685 1.1650 1.1610
Resistance levels: 1.1770 1.1820 1.1860
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.
