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  • EUR/USD tumbles further and tests the 1.1110 region.
  • German IFO came in short of expectations this month.
  • US Durable Goods Orders surprised to the upside in July.

The bearish mood stays intact around the European currency on Monday, pushing EUR/USD back to the 1.1100 neighbourhood amidst USD-buying and poor IFO results.

EUR/USD fades Friday’s up move

 After moving to the 1.1160/65 band, or two-week tops during early trade, the pair has come under renewed selling pressure and is now trading at shouting distance from the key support at 1.1100 the figure.

Alleviated trade concerns on the likeliness of the resumption of US-China talks have encouraged US yields to rebound from lows, adding to the better mood in the risk-associated space and lending extra legs to the buck.

Spot also derived further weakness after US Durable Goods Orders came in above estimates, expanding at a monthly 2.1% during July. Core orders contracted 0.4% MoM vs. a forecasted 0.1% gain. Further data saw the Chicago Fed National Activity Index at -0.36 for the month of July, below consensus.

In Euroland, earlier results saw the German IFO coming in short of expectations in all of its components for the current month.

What to look for around EUR

The pair charted a bullish ‘outside day’ last Friday and today’s price action should be key in assessing the potential for further recovery in the next days. In the meantime, US-China trade jitters continue to drive the sentiment in the global markets, while expectations of ECB easing and Italian politics warns against the sustainability of occasional bullish attempts, all amidst the unremitting deterioration of the economic outlook in the region.

EUR/USD levels to watch

At the moment, the pair is retreating 0.20% at 1.1115 and faces immediate contention at 1.1109 (low Aug.26) followed by 1.1051 (low Aug.23) and finally 1.1026 (2019 low Aug.1). On the flip side, a break above 1.1186 (61.8% Fibo of the 2017-2018 up move) would target 1.1212 (55-day SMA) en route to 1.1282 (high Jul.19).