- The EUR / USD loses more ground and falls below the 1.1550 level.
- The dollar recovers amid some aversion to risk.
- Euozone retail sales disappoint in August.
- ADP’s US report stands out on today’s economic calendar.
Sellers have regained control over the common currency and are now forcing the pair EUR / USD to record new 2021 lows below the 1.1550 region.
EUR / USD weaker due to dollar recovery
EUR / UD extends Tuesday’s losses and moves close to the 1.1550 region midweek after another episode of buying pressure around the USD, which in turn has been supported by rising US yields.
In fact, yields on the benchmark US 10-year bond surpassed 1.57% on Wednesday, the highest level since mid-June, while the 2-year bond is gradually approaching 0.30%.
In the economic calendar of the euro, Eurozone retail sales grew 0.3% monthly in August, five tenths below the 0.8% expected. Despite the disappointment, the result has improved compared to July, when they fell 2.6%.
Across the Atlantic, the release of the ADP report will draw investors’ attention, followed by MBA mortgage applications and the FOMC’s R. Bostic speech.
What can we expect around the EUR?
EUR / USD has reversed recent gains and reversed the rally to 1.1640 seen earlier in the week to refocus in the opposite direction and a possible test of the 1.1500 region in the not-too-distant future. The firmer tone in the dollar along with higher US yields continue to affect the performance of the risk universe, while the growth outlook appears under pressure from mounting speculation that inflation could take longer to reverse the current high levels. Additionally, the likely loss of momentum in the economic recovery, as well as some observed weakness in key fundamentals, also limits the pair’s upside potential.
EUR / USD levels
At the time of writing, the EUR / USD pair is down 0.45% on the day, trading at 1.1545. The next resistance is at 1.1640 (October 4 high), followed by 1.1703 (20-day SMA) and finally 1.1755 (September 22 high). On the other hand, a firm break below 1.1553 (October 6 low), would head to 1.1500 (round level) en route to 1.1495 (March 9, 2020 high).
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