EUR/USD eases lower to mid-1.17s as DXY remains near session highs
The EUR/USD pair continues to push lower in the second half of the NA session as greenback extends the gains against its competitors. As of writing, the pair was trading at 1.1750, losing 0.55% on the day.
A positive market sentiment on Tuesday seems to be the primary catalyst of the price action. With the demand for safe-haven US Treasuries remaining weak in the day, the yields on the bonds continue to rise higher with the 10 year-reference trading at $2.215, up 1.6% on the day. Boosted by higher yields, the US Dollar Index is now at 93.45, adding 0.48% on the day.
Earlier in the day, the Economic Sentiment published by the ZEW plummeted to 10 in August from 17.5 in July in Germany while the same data for the EU dropped to 29.3 from 35.6, both missing the market expectations. Later in the day, regional manufacturing and service index data from the U.S. surpasses the estimates, revealing that both sectors are picking up the pace in August.
On Wednesday, Markit will release its manufacturing and service PMI figures for Germany and the EU, and later for the United States. However, investors may choose to stay on the sidelines ahead of the Jackson Hole Symposium, which will start on Thursday and end on Saturday. The ECB President Draghi and the FOMC Chairwoman Yellen are both scheduled to speak at the conference.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet, writes, "the short term technical outlook is neutral according to the 4 hours chart, with the price right below directionless 20 and 100 SMAs, whilst technical indicators head nowhere around their mid-lines. The immediate support is the weekly low, at 1.1730, with a more relevant one in the 1.1680/90 region. Below this last, the pair can gain bearish momentum and extend its monthly decline beyond the current low of 1.1661. Strong selling interest is capping advances in the 1.1820/30 price zone, so it will take a break beyond 1.1860 to see the pair gaining bullish traction."
According to the analyst, supports for the pair could be seen at 1.1730, 1.1685 and 1.1650 while resistances align at 1.1825, 1.1860 and 1.1910.
- EUR/USD: a poor performance overnight - Scotiabank
Today's data from the U.S.
- Richmond Fed: Service sector firms report improved activity in August
- Richmond Fed: Composite index remained at 14 in August
- U.S. house prices rise 1.6% in second quarter
- Philly Fed: Firm-level general activity index rose to its highest reading in 4 months