EUR/USD analysis: upside limited by risk sentiment, German jitters

EUR/USD Current price: 1.1615

• Upside capped by mounting tension within Merkel's government over immigration policies.
• EUR/USD needs to recover beyond 1.1715 to shrug of the bearish pressure, quite unlikely today.

The EUR/USD pair gapped lower at the weekly opening, falling to 1.1564 before bouncing with London's opening. The pair reached a high of 1.1623 so far today but stabilized around the current 1.1615 level after the initial impulse that filled the early gap. Political jitters in Germany are capping the upside for the common currency, on mounting tension within Merkel's government over immigration policies. Also, concerns generated by the trade war between the US and China is keeping high-yielding assets under pressure today, including the suffered EUR that can't pick up after the ECB's latest meeting dovish outcome.

The macroeconomic calendar will remain quite light all through the day, with nothing of relevance coming from the EU and the US only offering speeches from Fed's officers, which would have little to add to what the central bank announced last week.

Technically, the pair retains its bearish stance, as in the 4 hours chart, technical indicators barely corrected oversold readings before resuming their declines, while the pair is developing below all of its moving averages, with the 20 SMA accelerating south below the larger ones. The pair is still far from a key resistance, the 1.1715 level, which stands for the 23.6% retracement of the April/May slump. The pair would need to recover beyond it to attract more buying interest, something quite unlikely in the current environment. The key support, on the other hand, is the 1.1509, the yearly low as below it the bearish trend will likely gain momentum.

Support levels: 1.1580 1.1545 1.1510

Resistance levels: 1.1660 1.1690 1.1715

View Live Chart for the EUR/USD