- EUR/USD loses further momentum and breaches 1.1800.
- The dollar extends the recovery further above 93.00 so far.
- US Durable Goods Orders surprised to the upside in July.
The selling pressure around the European currency is now picking up extra pace and forces EUR/USD to print fresh multi-day lows in the vicinity of 1.1770 on Wednesday.
EUR/USD loses momentum on USD-recovery
EUR/USD is now attempting to stabilize around the 1.1800 neighbourhood amidst the broader consolidative range between monthly lows around 1.17 and the area of 2020 peaks near 1.1970.
The ongoing recovery in the greenback has been undermining Tuesday’s uptick in the pair amidst auspicious developments from the US-China protracted trade war, while market participants continue to monitor incoming results from key fundamentals in the region vs. increasing cases of coronavirus across the Old Continent.
On the data front and from the US calendar, MBA’s Mortgage Applications contracted 6.5% WoW and Durable Goods Orders expanded 11.2% inter-month in July. Core orders, in the meantime, expanded 2.4%, both readings surpassing previous estimates. Earlier in the session, France’s Consumer Confidence remained at 94 for the current month.
What to look for around EUR
EUR/USD is now facing some consolidation after hitting fresh tops near 1.1970 earlier in the month. The July-August rally, while largely triggered by broad-based dollar-selling and improved sentiment in the risk-associated universe, found extra sustain in auspicious results from domestic fundamentals – which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis – and US-China trade headlines. Also lending wings to the momentum around the euro appear the deal on the European Recovery Fund – which helped putting political fears within the bloc to rest (for now) – and the solid position of the current account in the region.
EUR/USD levels to watch
At the moment, the pair is losing 0.15% at 1.1816 and faces the next support at 1.1772 (weekly low Aug.26) seconded by 1.1754 (weekly low Aug.21) and finally 1.1695 (monthly low Aug.3). On the upside, a breakout of 1.1965 (2020 high Aug.18) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally).
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