The EUR/USD pair has bounced off during the European session to trade at 1.1758 level after testing the triple bottom support level of 1.1719 level. Overall, the EUR/USD has a bearish bias as hope provided by Trump raised U.S. dollar bars in the market, and that pulled EUR/USD pair from its daily high to below 1.1800 level.
Meanwhile, the risk sentiment was also disturbed by the fears of escalating China-US tensions. China announced that it would also impose sanctions on 11 Americans in retaliation to the U.S. same sanctions on Hong Kong & Chinese officials. The list of Americans to be sanctioned by China included Senator Macro Rubio and Ted Cruz also.
The faded risk sentiment weighed on EUR/USD pair and pair started to lose its daily gains.
At the USD front, the broad-based U.S. dollar succeeded in gaining some positive traction on the day amid the hopes for U.S. stimulus, but the bullish bias in the U.S. dollar is expected to be short-lived as doubts remain about the U.S. economic recovery amid on-going coronavirus cases. However, the gains in the U.S. dollar became the key factor that kept the currency pair lower. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped 0.06% to 93.537 by 10:01 PM ET (3:01 AM GMT).
At 17:30 GMT, the Core PPI from the U.S. for July rose to 0.5%from the 0.1% of expectations and supported the dollar. The PPI for July also rose to 0.6% from the expected 0.3% and came in favor of the dollar.
The better than expected PPI data from the U.S. added strength to the U.S. dollar and added pressure to EUR/USD pair, causing it to lose all daily gains and close at the same level the market was opened.
Daily technical Levels
Support resistance
106.04 106.82
105.59 107.15
105.26 107.60
Pivot point: 106.37
Technically, the EUR/USD is trading at 1.1754 level, bouncing off from the 1.1719 support area. The downward regression channel is likely to provide support at 1.1719 level, and above this, the pair has the potential to go after 1.1804. A further bullish breakout of the 1.1804 level can extend buying unto 1.1896 level. We should look for selling trades upon the bearish breakout of the 1.1719 trading level today. Good luck!