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Forex

EURUSD comes under selling pressure near 1.1070

GKFX | Aug. 20, 2019
EURUSD comes under selling pressure near 1.1070

A bout of selling pressure is now hitting the single currency and dragging EURUSD to fresh weekly lows in the 1.1070 region.

20 August 2019, GKFX – The pair is prolonging the leg lower for yet another session on Tuesday, shifting the attention to the 1.1070/60 band after failing to extend the initial spike beyond the 1.1090 region.

The move lower in spot comes in tandem with another dip in yields of the key German 10-year Bund to the -0.67% zone following yesterday’s rebound to the -0.62% area.

In the meantime, the greenback is flirting with two-week highs when measured by the US Dollar Index (DXY) against the backdrop of absent developments from the trade front and some mild bias towards the risk-off trading.

In the docket, German Producer Prices surprised to the upside in July, rising 0.1% inter-month and 1.1% from a year earlier. Later in the day, Construction Output in the broader eurozone is also due.

What to look for around EUR

EUR has finally succumbed to the downside pressure and is extending the recent breakdown of the 1.1100 handle on the back of shrinking ‘repatriation’ forces, renewed buying interest surrounding the buck and expectations of ECB easing.

That said, sustained bullish attempts in the pair still look flimsy amidst ECB’s preparations for a fresh wave of monetary stimulus (most likely to be announced in September), including a potential reduction of interest rates, the re-start of the QE programme and a probable tiered deposit rate system.

This scenario has been confirmed as of late following poor results from the euro-docket, adding to the unremitting deterioration of the economic outlook in the region. On another front, Italian politics has resurfaced as a source of uncertainty as of late and is expected to weigh on the sentiment sooner rather than later.

EURUSD technical analysis

At the moment, the pair is losing 0.02% at 1.1075 and faces immediate contention at 1.1066 (low Aug.16) seconded by 1.1026 (2019 low Aug.1) and finally 1.0839 (monthly low May 11 2017). On the flip side, a break above 1.1141 (21-day SMA) would target 1.1224 (55-day SMA) en route to 1.1282 (high Jul.19).

Disclaimer

This article was provided by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you, then this should be solely at your discretion, and GKFX will not be held accountable in any way.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.