The EURUSD pair at a rate of 1.07851 is losing momentum in its attempt to recover from a support line that has been trending upwards for multiple days.

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• EUR/USD fades the week-start rebound from a multi-day-old rising support line.

The pair currently trades last at 1.07851.

The previous day high was 1.0809 while the previous day low was 1.0772. The daily 38.2% Fib levels comes at 1.0795, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0786, expected to provide resistance.

EUR/USD prints mild losses around 1.0780 as it prods a 5.5-month-old rising support line amid the early hours of Tuesday’s European session. In doing so, the Euro pair reverses the previous day’s rebound from the stated support line as the European Central Bank (ECB) officials fail to produce hawkish signals while the US Dollar traces yields to remain firmer ahead of multiple catalysts from the Eurozone and the US.

Recently, the August 31 interview from ECB Chief Economist Phillip Lane crossed wires, via Irish Business Publication, The Currency, as he praised softening in the August inflation data. The policymaker, however, cited the need for continuation of such statistics to push back the hawks.

On Monday, ECB President Christine Lagarde highlighted the need for central banks to keep the inflation expectations firmly anchored. On the same line was the President of the Deutsche Bundesbank and the ECB Council Member Joachim Nagel who advocated for price stability while hesitating from further details.

It’s worth noting, however, that Friday’s upbeat US Nonfarm Payrolls (NFP) and the global rating giant Moody’s upward revision to the US growth forecasts seem to justify the hawkish Fed concerns and weighed on the Euro price. That said, Cleveland Fed President Loretta J. Mester defended the US central bank’s hawkish move and ruled out the rate cut bias in her speech on Friday.

Elsewhere, the market’s lack of confidence in the Chinese measures to defend the economy, as well as the recent Sino-American tensions over Taiwan and the US businesses’ discomfort in Beijing, prod the market sentiment and put a floor under the US Dollar. That said, China recently announced a slew of quantitative and qualitative measures to defend the economy from COVID-19. On the same line is the latest news suggesting the ability to avoid default by China’s biggest reality player Country Garden.

Against this backdrop, the the US Dollar Index (DXY) prints mild gains around 104.25, after pausing a two-day uptrend the previous day. That said, S&P 500 Futures prints mild losses whereas the US 10-year Treasury bond yields rose three basis points (bps) to 4.21% after a holiday-driven inaction.

Talking about the data, the Eurozone Sentix Investor Confidence Index and the Expectations Index slid for September but the Current Situation Index dropped to the lowest level since November 2022 and bolstered the dovish bias about the EUR/USD pair.

Looking forward, the market’s lack of acceptance to the ECB hawks and comparatively downbeat Eurozone data keeps theEUR/USD sellers hopeful as they await the bloc’s Producer Price Index (PPI) data for July for immediate directions ahead of the US Factory Orders for the said month.

The EUR/USD pair’s failure to extend the week-start rebound from an ascending support line from March 15, close to 1.0780 by the press time, beyond the 200-DMA level of 1.0820 joins the bearish MACD signals to keep the Euro sellers hopeful.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0784 at the time of writing. Pair opened at 1.0795 and is trading with a change of -0.10% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.0877, 50 SMA 1.0966, 100 SMA @ 1.0921 and 200 SMA @ 1.0818.

The previous day high was 1.0809 while the previous day low was 1.0772. The daily 38.2% Fib levels comes at 1.0795, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0786, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.0775, 1.0755, 1.0738
• Pivot resistance is noted at 1.0812, 1.0829, 1.0849

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