EUR/USD: Bears in control, 1.1710 tested ahead of US PPI

The EUR/USD pair resumes its ongoing downward spiral, now printing fresh daily lows of 1.1711, with the bears targeting 1.17 handle ahead of the US datasets.

EUR/USD eyes US data for fresh impetus

Over the last hours, the EUR/USD pair stalled its tepid recovery mode and came under renewed selling pressure, mainly driven by a fresh bout of buying interest seen around the US dollar versus its main competitors.

The renewed upside in the US dollar gained traction in the European session, as the shorter duration Treasury yields turned positive amid expectations of upbeat factory gate inflation data due out from the US later today, with the special focus remaining on the core figures.

The US PPI data for July is expected to come in at 0.1% versus 0.1% seen previously, while the core figures are expected to edge slightly higher to 0.2% versus 0.1% booked in June.

Further, risk-off trades seen in the European equities also have virtually no impact on the funding currency Euro. Meanwhile, widening yield spread between the 10-year US-German yields also fails to lift the sentiment around the main currency, as rising US inflation expectations continue to lend support to the buck.

EUR/USD Technical Set-up  

Haresh Menghani, Analyst at FXStreet explains: “A convincing break through the 1.1700-1.1690 region now seems to pave way for extension of the pair's near-term corrective slide and could accelerate the fall towards 1.1645-40 intermediate support, before the pair eventually aims towards testing the 1.1600 handle marked by 38.2% Fibonacci retracement level of 1.1119-1.1910 latest leg of up-move.  Alternatively, a sustained move above the descending trend-line resistance, currently near the 1.1765 region, should lift the pair back towards the 1.1800 handle.”