Rebound remains capped near 1.1750, US PPI eyed


  • EUR/USD struggles to extend the rebound near 1.1750.
  • Daily technical setup remains in favor of the EUR bears.
  • Focus shifts to US PPI, Jobless Claims for fresh impetus.

EUR/USD appears to have faltered its rebound from five-month lows this Thursday, as the price consolidates just below the 1.1750 level amid a risk-off market mood.

The US dollar licks its wounds in the aftermath of a softer inflation report, which eased the pressure off the Fed for an imminent hawkish move. The Treasury yields also trend lower capping the downside in the spot.

However, Chinese crackdown-led risk aversion and the recent series of dismal German economic data keep the EUR bulls on the defensive.

Looking forward, the major now awaits the US PPI and Jobless Claims data for fresh trading impulse. In the meantime, the dynamics in the dollar and yields will continue to play out amid a tepid risk tone.

EUR/USD technical outlook

From a near-term technical perspective, EUR/USD’s daily chart shows that there is some additional room for the downside.

If the selling pressure returns, then the pair could drop back towards the multi-month troughs of 1.1706, below which a sell-off towards the falling trendline support at 1.1657 cannot be ruled out.

The 14-day Relative Strength Index (RSI) trades flat but well below the midline, keeping the bearish interests alive and kicking.

EUR/USD: Daily chart

Alternatively, the cable bulls see immediate resistance at Wednesday’s high of 1.1754.

Further up, the August 9 high of 1.1769 could be on the buyers’ radar. Acceptance above the latter could fuel a run towards the bearish 21-Daily Moving Average (DMA) at 1.1803.

To conclude, any pullbacks in EUR/USD from multi-month lows are likely to remain shallow, as the risks remain skewed to the downside for the major.  

EUR/USD: Additional levels to consider

 

 



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