The EUR/USD pair remains near its monthly low of 1.09050 and is not showing any significant movement, reflecting the cautious sentiment in the market.

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• EUR/USD stays sidelined near monthly low, keeping Tuesday’s inaction amid cautious mood.

The pair currently trades last at 1.09050.

The previous day high was 1.0952 while the previous day low was 1.0897. The daily 38.2% Fib levels comes at 1.0931, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0918, expected to provide resistance.

EUR/USD treads water around 1.0900 as it repeats the previous day’s inaction at the lowest levels in five weeks amid early Wednesday morning in Europe.

The Euro pair’s latest inaction could be linked to the market’s cautious mood ahead of a slew of second-tier economics from the Eurozone and the US. Also likely to prod the EUR/USD traders is the mixed bias about China-linked risk aversion and the US Dollar’s latest retreat.

That said, the US Dollar Index (DXY) seesaws around 103.20 as it prods a five-month-old descending resistance line at the highest level in a month. In doing so, the Greenback’s gauge versus the six major currencies traces the latest pullback in the US 10-year Treasury bond yields from the yearly top to 4.20%. However, the US stock futures and equities in the Asia-Pacific zone appear dull and restrict the EUR/USD moves.

On Tuesday, Germany’s ZEW Economic Sentiment improved to -12.3 for August versus -14.4 expected and -14.7 prior but the Current Situation gauge dropped to -71.3 from -59.5 previous readings and -63.0 market forecasts. That said, the Eurozone ZEW Economic Sentiment also recovered to -5.5 from the analysts’ estimations of -12.0 and -12.2 prior. Not only the data but the official statement from the ZEW Institute also appeared optimistic as it said, “Respondents, by and large, do not anticipate any further interest rate hikes in the eurozone and the United States and the economic outlook for the USA has seen a significant increase – these factors contribute to the improved expectations for Germany.”

Alternatively, China’s downbeat statistics for July joined the People’s Bank of China’s (PBoC) surprise rate cuts and looming credit rating downgrade of the major US companies to weigh on the sentiment and the EUR/USD prices.

Further, upbeat US data and the hawkish Fed talks also weigh on the Euro prices. That said, the US Retail Sales grew 0.7% MoM in July versus 0.4% expected and 0.3% reported in June (revised from 0.2%). The details suggested that the Core Retail Sales, namely the Retail Sales ex Autos, grew 1.0% versus 0.4% market forecasts whereas the Retail Sales Control Group doubled from 0.5% previous readouts (revised from 0.6%) to 1.0% for the said month. Further, the US NY Empire State Manufacturing Index slumped to -19.0 from 1.1 prior and -1.0 market forecasts while the US Export Price Index and Import Price Index improved on MoM in July but edged lower on a yearly basis for the said month.

Late Wednesday, Minneapolis Federal Reserve President Neel Kashkari ruled out talks of policy pivot by citing hot inflation and the uncertainty about the Fed’s progress in taming the same. The policymaker also said that he is not ready to say that the Fed is done raising rates, per Reuters.

Looking ahead, a likely improvement in the Eurozone statistics may allow the Euro pair to push back the bearish bias ahead of the Fed Minutes. Should the FOMC members show readiness for a rate hike before the policy pivot, the EUR/USD won’t hesitate to decline further.

Tuesday’s Doji candlestick joins the nearly oversold RSI (14) line to prod the EUR/USD bears above the seven-week-old horizontal support region around 1.0845–35. That said, the bearish MACD signals and the quote’s sustained trading below the 100-DMA, as well as a one-month-old falling trend line, around 1.0935–30 of late, joins the early month’s downside break of an ascending trend line from late May to keep the sellers hopeful.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0906 at the time of writing. Pair opened at 1.0907 and is trading with a change of -0.01% % .

The pair is trading below its 20 Daily moving average @ 1.101, below its 50 Daily moving average @ 1.097 , below its 100 Daily moving average @ 1.0931 and above its 200 Daily moving average @ 1.0781

The previous day high was 1.0952 while the previous day low was 1.0897. The daily 38.2% Fib levels comes at 1.0931, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0918, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.0885, 1.0864, 1.083
• Pivot resistance is noted at 1.094, 1.0974, 1.0996

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