- A pause in US dollar selling caps the EUR’s recovery from 1.1530 region.
- A sharp drop in the US durable goods could drive EUR/USD back above 1.1600.
The recovery in the EUR/USD pair lost legs at 1.1580 levels, now consolidating the renewed upside near 1.1565 region, as the bulls await fresh impetus from the US durable goods data and Fed Chair Powell’s speech due later in the NA session.
The Asian bounce in the spot from the 1.1530 levels can be mainly attributed to the renewed weakness in the US dollar across its main competitors after the US-China trade talks concluded inconclusively, Meanwhile, increased nervousness ahead of the Powell speech, especially after Trump’s Fed criticism on the rate hike policy also keeps the USD bulls on the defensive.
Markets ignored the in0line with expectations German Q2 final GDP numbers, as the sentiment around the US dollar remains the primary driver heading into the US data release and Jackson Hole Symposium.
The US durable goods orders are expected to drop to -0.5% in July versus +0.8% booked in June. Core figures are likely to rise to +0.5% versus +0.2% last.
EUR/USD Technical Levels
According to Slobodan Drvenica at Windsor Brokers, “Rising bullish momentum on daily chart is supportive for further recovery and retest of key near-term barrier – falling 55SMA (1.1616), close above which would signal bullish continuation. In addition, reversal pattern has formed on weekly chart, on previous week’s hammer and this week’s strong rally which penetrated thick weekly cloud, suggesting that further advance could anticipated in coming sessions. Weekly close above key supports at 1.1528/25 (20SMA/weekly cloud base) is needed to confirm scenario. Res: 1.1578; 1.1616; 1.1640; 1.1659. Sup: 1.1549; 1.1525; 1.1500; 1.1462.”
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