The EUR/USD pair was closed at 1.17848 after placing a high of 1.18168 and a low of 1.17108. Overall the movement of the EUR/USD pair remained bullish throughout the day. On Wednesday, EUR/USD pair dropped to its lower level in more than a week at 1.1711 level during the early European session, however, in the late trading session, the pair reversed its direction and started posting gains. At 14:00 GMT, the Industrial Production for June dropped to 9.1% from the anticipated 10.1% and weighed on single currency Euro. In June, the industrial production contracted by 26% from previous months and weighed heavily on the local currency that dragged the EUR/USD pair in downside direction towards the 1.17100 level.
However, after that, the German 30-year government bond yield turned positive on Wednesday and the 10-year yield advanced to its highest level in the month to provide strength to the shared currency Euro. On the other hand, Wall Street’s main indexes remained in the positive territory and caused the greenback to continue to lose interest as a safe-haven. The US Dollar Index rose to 93.91 on Wednesday and erased its gains and reached 93.41 level. The core Consumer Price Index rose to 0.6% every year in July and surpassed the forecast of 0.2% from the US. In July, the Consumer Price Index rose to 0.6% from the forecasted 0.3% and supported the US dollar.
Meanwhile, on Wednesday, The Dallas Federal Reserve President Robert Kaplan said that the US economy's recovery had been muted by the resurgence of the coronavirus from the past few weeks. He also said that the coronavirus pandemic could also damage the improvement in the unemployment rate.
These downbeat comments from Kaplan exerted pressure on the US dollar and lifted the EUR/USD pair in the second half. Furthermore, on Wednesday, the European Union called for intensified efforts to resolve trade disputes with the United States after the US imposed tariffs on European aircraft and other goods.
An EU official said that the EU Commission acknowledged the US's decision not to worsen the ongoing aircraft dispute by increasing tariffs on European products. He also said that both sides should intensify their efforts to find a negotiated solution.
The Airbus spokesman Clay McConnell on Wednesday showed his disappointment and said that it was regretful that despite Europe’s recent action to achieve full compliance, the US trade representative had decided to maintain tariffs on Airbus aircraft, especially at a time when aviation and other sectors were going through an unprecedented crisis.
Moreover, despite the trade tensions between the EU & US, the EUR/USD pair remained on bullish track on Wednesday as the risk sentiment was continuously supporting the currency pair. The market kept ignoring the fact that US lawmakers were still unable to reach an agreement on the next coronavirus aid package, and felt comfortable with the executive orders on the matter from the US President Donald Trump. It kept the risk sentiment alive and EUR/USD pair on the up track.
Daily Technical Levels
Pivot point: 1.1769
The EUR/USD is trading with a bullish bias at 1.1839, crossing over the 50 EMA resistance level of 1.1780. For now, the EUR/USD may find support at 1.1780 level now. On the higher side, the EUR/USD pair may find resistance at 1.1897. The RSI and MACD are in support of buying trends; therefore, we should look for buying trades in the EUR/USD pair. Good luck!