EUR/USD retreats from the 6-1/2 week high

The EUR/USD has backed-off from the 6-1/2 week high of 1.0773, although the losses remain muted as Trump’s policies are making investors nervousness.

Trump’s decision to withdraw from the TPP suggests he intends to pursue protectionist policies. Protectionism coupled with increased fiscal spending could be good for the US dollar; however, in the short-run the currency may suffer losses if the global markets turn risk averse.

EUR eyes PMI data

The preliminary manufacturing and services PMI data are due for release across the Eurozone. The headline figure could dominate the wires; however, the common currency is more likely to take cues from the inflation sub indices.

Later in the day, US existing home sales and Richmond Fed manufacturing index could influence the dollar side of the story.

EUR/USD Technical Levels

The pair clocked a session low of 1.0745 and was last seen trading around 1.0755. A break above 1.0773 (session high) would open the doors to 1.0820 (50% of the Trump sell-off), above which the spot could test 1.0842 (100-DMA). On the lower side, support of 5-DMA at 1.07 if breached would shift risk in favor of a drop to 10-DMA level of 1.0665. Bears need to observe caution around 10-DMA, given the moving average is sloping upwards. A sustained move lower could yield a test of support at 1.0586 (downward sloping 50-DMA).