The EUR/USD pair created a doji candle last week, indicating bearish exhaustion/that sell-off from the April high of 1.2414 has run out of steam.
Still, it is too early to call a bottom as the pair failed twice to hold above 1.17 on Friday despite receding Italian fears.
Moreover, the trade tensions could be keeping the EUR bulls at bay. Last week, President Trump delivered opening salvo in a global trade by slapping tariffs on European steel and aluminum. The EU has vowed to fight back and so has China and Mexico. The global economy is facing a full-blown trade war as tit-for-tat tariffs have begun.
Further, Nationalists regained control of Catalonia’s government on Saturday and immediately called for independence talks.
Meanwhile, the probability of three more Fed rate hikes this year has gone up after Friday’s strong US non-farm payrolls report.
Hence, the odds are stacked against the EUR bulls. That said, the pay may find acceptance above 1.1723 (23.6% Fib R of 1.2414-1.1510) today if the Eurozone Sentix investor confidence and producer price index better estimates.
EUR/USD Technical Levels
Resistance is seen 1.1723 (23.6% Fib R of 1.2414-1.1510), 1.1757 (4-hour 100MA), 1.1830 (resistance on 4H chart).
Support is located at 1.1618 (support on 4H chart), 1.1554 (July 11 low), 1.1510 (recent low).