EUR/USD Current Price: 1.0188

  • US Treasury yields retreated sharply on Monday, weighing on the dollar’s demand.
  • EU August Sentix Investor Confidence contracted to -25.2, worse than anticipated.
  • EUR/USD is neutral-to-bearish, could accelerate its slide once below 1.0105.

The EUR/USD pair struggles to advance beyond the 1.0200 level despite the broad dollar’s weakness, trading around it by the end of the American session. Speculative interest was looking at government bond yields for direction, in the absence of any other relevant catalyst, with lower yields weighing on the greenback. Yields eased on Monday as stocks advanced, with that on the 10-year Treasury note retreating to 2.76% after peaking at 2.85%.

The focus is on US inflation data as the country will release the July Consumer Price Index next Wednesday. The inflation rate is expected to have contracted to 8.7% YoY from 9.1% in the previous month. The core reading, however, is foreseen ticking higher, from 5.9% YoY in June to 6.1%.

In the meantime, the EU published August Sentix Investor Confidence, which came worse than anticipated, printing at -25.2 vs the -24.7 forecasted, while the US calendar remained empty. On Tuesday, the US will release the July NFIB Business Optimism Index and Q2 Nonfarm Productivity and Labor Cost.

EUR/USD short-term technical outlook

Technically, the daily chart for EUR/USD shows that the risk skews to the downside, although further confirmation is pending. A mildly bullish 20 SMA provides intraday support as the pair hovers around the 38.2% retracement of the daily slide between 1.0614 and 0.9951, at 1.0205.  Meanwhile, the Momentum indicator is crossing its midline into negative territory, while the RSI indicator remains directionless within negative levels.

The 4-hour chart shows that technical indicators remain directionless around their midlines as the pair develops a few pips above converging 20 and 100 SMAs, reflecting the absence of speculative interest. The bearish case should be firmer if the pair falls below 1.0150, an immediate static support level, while bulls may gain control only on a clear advance beyond 1.0280, the 50% retracement of the aforementioned daily slump.

Support levels: 1.0150 1.0105 1.0070

Resistance levels: 1.0240 1.0280 1.0325

View Live Chart for the EUR/USD

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