EUR/USD bulls take a breather above 1.16

The EUR/USD pair benefited from the broad-based selling pressure witness on the USD in the early NA session and erased its daily losses to turn positive above the 1.16 mark. After advancing to a fresh session high at 1.1633, the pair lost its momentum and was last seen trading at 1.1603, where it was up 0.25% on the day.

The sudden risk-aversion felt in the last cıouple of hours dragged the 10-year US T-bond yields below the 2.9% mark and weighed on the greenback. The US Dollar Index, which rallied to a fresh 11-month high above 95 earlier today, dropped all the way down to 94.33 before starting to consolidate its losses. At the moment, the index is down 0.23% on the day at 94.55.

Meanwhile, today's data from the United States disappointed with the Philly Fed Manufacturing Index missing the market expectation of 29 with 19.9 in June. Furthermore, the housing price index came in at 0.1% in April to fall short of experts' estimate of 0.3%.

On the other hand, the shared currency could have a difficult time extending its rivals in the near-term amid political jitters in Italy. Alberto Bagnai, a known anti-euro economist, was announced as the new head of Italian parliamentary finance committee as the League and the anti-establishment 5-Star Movement put together their coalition government.

Technical outlook

Despite this recent rise, the RSI indicator on the daily chart continues to stay below the 50 mark, suggesting that buyers are not yet dominant enough for the pair to stretch higher. The pair could encounter the first technical resistance at 1.1685 (20-DMA), ahead of 1.1735 (May 31 high) and 1.1815 (Jun. 14 high). On the downside, supports are located at 1.1505/00 (daily low/psychological level/May 29 low), 1.1435 (Jul. 17, 2017 low) and 1.1370 (Jul. 13, 2017, low).