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  • The U.S. is reportedly preparing new sanctions against Turkey.
  • US Dollar Index advances to 96.70.

The EUR/USD pair, which seemed to be enjoying a consolidation phase near the 1.14 mark in the NA session, came under a renewed selling pressure as the greenback started to gather strength on latest Turkey headlines. At the moment, the pair is trading at 1.1362, still up 0.12% on the day.

According to Bloomberg, the U.S. Treasury Secretary, Steven Mnuchin, said that they were preparing new sanctions against Turkey if pastor Brunson, who is at the center of the political crisis, wasn’t released. Furthermore, President Trump said, “Turkey hasn’t turned out to be a great friend.” The USD/TRY pair quickly rose to 5.95 and turned flat on the day. At the moment, the US Dollar Index is also unchanged on a daily basis at 96.70.

Earlier today, the upbeat trade surplus figures from the euro area and a weaker greenback helped the pair to continue to pull away from the critical 1.13 mark, at which the pair renewed its 2018 low on Wednesday.  

On Friday, investors will be focused on the eurozone inflation data. Experts expect the core-CPI to decline 0.5% on a monthly basis in July and see the annual rate unchanged at 1.1%. A disappointing inflation report is likely to weigh on the shared currency as it would confirm the ECB’s cautious  stance.  

Technical levels to consider

The pair could face the first resistance at 1.1410 (daily high) ahead of 1.1500 (psychological level) and 1.1550 (20-DMA). On the downside, supports could be seen at 1.1335 (daily low), 1.1300 (psychological level/Aug. 15 low) and 1.1200 (psychological level/Jun. 1, 2017, low).