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EUR/USD hits fresh 6-day lows near 1.1200

  • Germany’s Von Der Leyen confirmed as European Union Commission President.
  • Powell: Fed to act as appropriate amid increased uncertainties.
  • US Dollar holds to gains across the board, DXY up 0.45%.  

The EUR/USD pair dropped to 1.1202 hitting the lowest level since last Wednesday. It was holding near the lows, under pressure, amid a stronger US Dollar. The greenback appreciated earlier today after the US Retail Sales data. It held to gains following Federal Reserve Chairman Powell comments.  

Powell expects growth to remain solid and the labor market strong. He also warned the central bank is ready to act as appropriate amid increased uncertainties. Robert Kaplan, Dallas Fed President, later added he believes Fed funds rate will stabilize after one cut.

Earlier today the greenback received a boost after data showed, retail sales in the US expanded 0.4% in June, surpassing expectations. Previously, the ZEW Survey showed German Economic Sentiment deteriorated further.

US retail sales data favored U.S. bond yields. Both the 2Y and 10Y U.S. increased about 4 bps. Meanwhile, in Europe, search for yield continued benefiting peripherals and risk premiums declined. Italy’s risk premium narrowed, and the risk premium stands at 186 basis points U.S. retail sales data helped the index tracking the dollar, the DXY was up 0.4%. Deterioration in confidence among German investors also contributed to the decline of the euro with the dollar“, wrote BBVA analysts.  

Testing 1.1200

From a technical perspective, EUR/USD remains under pressure. It is hovering slightly above 1.1200 that is the key short term support. A break lower could open the doors to a bearish acceleration, targeting 1.1180, the next strong support. To the upside, resistance levels might be seen at 1.1235 and 1.1245. A recovery above 1.1250 would remove the current negative bias.  

 

 

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