“¢ Strong follow-through USD buying prompts some fresh selling.
“¢ Technical selling keeps exerting additional downward pressure.
“¢ A fall back towards YTD low now looks a distinct possibility.
The EUR/USD pair kept losing ground through the mid-European session and is currently placed at over five-week lows, below mid-1.1500s.
The pair extended last week’s retracement slide from the vicinity of mid-1.1700s and remained under some selling pressure for the fifth consecutive session amid a strong follow-through US Dollar buying interest.
The July month US jobs report reaffirmed expectations for a gradual Fed rate hike path. This coupled with intensifying US-China trade war fears underpinned the greenback at the start of a new trading week and was seen as one of the key factors exerting some fresh downward pressure on the major.
The shared currency was further weighed down by weaker German factory orders data, coming in to show a sharp contraction of 4.0% in June as compared to a 2.6% growth recorded in the previous month, which overshadowed better-than-expected Euro-zone Sentix investor confidence index for August.
There aren’t any major market-moving economic releases due from the US and hence, the USD price dynamics might continue to act as an exclusive driver of the pair’s momentum.
Technical Analysis
Today’s downfall could also be attributed to some technical selling after last week’s bearish breakdown by a short-term ascending trend-line support, forming a part of a symmetrical triangle on the daily chart.
Moreover, daily technical indicators are still from being oversold and hence, a continuation of the ongoing bearish trajectory, back towards YTD lows, now looks a distinct possibility.
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