EUR/USD finds support around 1.1650, consolidates losses

• US dollar holds firms across the board after bouncing sharply to the upside.
• EUR/USD eared yesterday’s gains, falling sharply back under 1.1700.

The EUR/USD pair is consolidating losses and headed toward the lowest close since July 4. A stronger US Dollar pushed the pair to the downside. It bottomed at 1.1648 during the US session. Afterward rebound modestly, being unable to rise back above 1.1670.

At the time of writing, was hovering around 1.1660, slightly above the 20-day moving average and down 50 pips for the day. From the daily high to the daily low it fell a hundred pips. Earlier today hit at 1.1744 the highest level in six days, but a few hours later dropped below Monday’s low.

The greenback continued to rise during Fed’s Powell testimony at the Senate Banking Committee. He said that the correct policy was to keep rising rates at a gradual pace. On Wednesday, he will be back at Congress but his words might have no impact on markets. In the EZ, inflation data is due.

Technical outlook

The pair is gaining downward traction, but still inside familiar levels. In the 4 hours chart, it fell below all of its moving averages, which are confined to a tight range and directionless around 1.1680/90, while technical indicators turned south almost vertically, having already crossed their mid-lines”, says Valeria Bednarik, Chief Analyst at FXStreet.

According to her, renewed selling interest around the current level should lead to a test of 1.1590 (Jul 2 low) and below, 1.1550 is the next probable bearish target.