EUR/USD loses the grip further and approaches 1.1800

EUR/USD stays depressed near the 1.1800 level.
The DXY extends the recovery to new peaks past 92.70.
Consensus points to a dovish message at the ECB event.

Pablo Piovano FXStreet

The buying interest in the greenback stays well and sound and now forces EUR/USD too trade at shouting distance from the key support in the 1.1800 neighbourhood.

EUR/USD remains offered ahead of ECB

The weekly downtrend in EUR/USD remains unchanged, although it seems to still struggle to breach the key support at 1.1800 the figure on Wednesday.

The multi-session recovery in the dollar pushes the US Dollar Index (DXY) to fresh tops near 92.80 and slowly opens the door to a probable re-visit to the 93.00 neighbourhood in the short-term horizon.

Ahead of the key ECB gathering on Thursday, Board member R.Holzmann advocated for a sooner-than-expected normalization of the monetary policy on the back of potential upside risks in inflation, while his peer B.Vasle noted that “highly accommodative” policy is still needed to counteract the effects of potential new waves of the pandemic.

Data wise in the region, French Nonfarm Payrolls rose 1.1% QoQ in Q2 and the trade deficit came in at €7 billion in July. In Italy, Retail Sales contracted 0.4% MoM in July.

EUR/USD levels to watch

So far, spot is losing 0.18% at 1.1817 and faces the next up barrier at 1.1909 (monthly high Sep.3) followed by 1.1945 (100-day SMA) and finally 1.2000 (psychological mark, 200-day SMA). On the other hand, a break below 1.1808 (weekly low Sep.8) would target 1.1663 (2021 low Aug.20) en route to 1.1612 (monthly low Oct.20 2020).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD looks weak below 1.1800

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