- EUR / USD once again tested the 1.1700 zone on Monday.
- Risk aversion prevails and sustains the dollar’s rise.
- The NAHB index is next on the US calendar.
The EUR/USD it is now attempting a slight bounce to the 1.1710 / 15 area after bottoming at the 1.1700 area early in Monday’s session.
EUR / USD: Door open to further decline
EUR / USD loses ground for the third consecutive session on Monday and intensifies the sell-off towards the 1.1700 zone, where some initial containment appears to have emerged so far.
The lower leg in the pair comes once again after the strong rally in the dollar, this time reaching new monthly highs near 93.50 when measured by the US dollar index (DXY).
The pair’s weight also lines up with rising risk-off sentiment in response to increased anxiety over China’s Evergrande crisis, which morphed into additional wings for the dollar and strong demand for U.S. bonds, which yielded higher yields. low.
On the daily calendar, producer prices in Germany rose 1.5% month-on-month and 12.0% year-on-year in August, surprising the consensus to the upside.
Technical levels
So far, the pair is shedding 0.08% at 1.1716 and faces the next bullish barrier at 1.1845 (weekly high on Sept. 14) followed by 1.1909 (monthly high on Sept. 3) and finally 1.1922 (100-day SMA). On the other hand, a break below 1.1700 (September 20 monthly low) would target 1.1663 (August 20 low) en route to 1.1602 (November 4, 2020 monthly low).
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