- EUR / USD remains on the defensive near 1.1700.
- The bond sell-off pushes German yields to new highs.
- Durable goods orders from the US surprised to the upside in August.
The EUR/USD It resumes the 1.1700 zone after challenging the monthly lows near 1.1680 during the early hours of Monday.
EUR / USD offered by USD gains, watch out for Sintra
The EUR / USD pair adds to Friday’s slide and keeps the door open for a possible move towards the yearly lows near 1.1660 (Aug 20). The lower leg of the pair comes in response to the strong improvement in the dollar, which in turn is supported by the strong rebound in US yields.
Indeed, US 10-year benchmark bond yields are approaching the key hurdle of 1.50%, levels last seen in late June, as investors continue to adjust trading to the latest FOMC event and to the aggressive line message from Powell’s press conference.
On the euro calendar, the ECB’s M3 money supply expanded 7.9% in the year to August and loans to the private sector increased at 4.2% annualized. In addition, President Lagarde said the central bank will closely monitor both the reduction in wages and supply, while criticizing the impact of the current high inflation on long-term inflation expectations.
In the meantime, the pair will be on the lookout for the next ECB forum in Sintra on September 28-29, where C. Lagarde and other Board members are to speak.
Regarding the data in the American session, durable goods orders expanded more than expected 1.8% m / m in August and 0.2% excluding the transportation sector. Later in the American session, the Dallas Fed Manufacturing Index will also be released.
Technical levels
At time of writing, the pair is shedding 0.20% at 1.1697 and facing the next bullish barrier at 1.1755 (weekly high on Sep 22) seconded by 1.1784 (55-day SMA) and finally 1.1845 (weekly high on Sep 14) . On the other hand, a break below 1.1683 (September 23 monthly low) would target 1.1663 (August 20, 2021 low) on its way to 1.1602 (November 4, 2020 monthly low).
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