EURUSD @ 1.01696 -imp levels: drops towards 1.0150 amid risk-aversion, ahead of US data

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• EUR/USD turns south after rejection at 1.0200 as risk-off flows dominate.
• US dollar finds demand, despite weaker yields and cautious Fed minutes.
• The euro looks vulnerable amid the deepening EU energy crisis and growth risks.

The pair currently trades last at 1.01696.

The previous day high was 1.0203 while the previous day low was 1.0146. The daily 38.2% Fib levels comes at 1.0181, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0167, expected to provide support.

EUR/USD is heading towards 1.0150, on the defensive amid a risk-averse environment in Thursday’s trading so far.

The US dollar Is finding renewed safe-haven bids, courtesy of brewing geopolitical tensions between the US and China after the former announced formal trade negotiations with Taiwan early this autumn. Additionally, investors assess the Fed July meeting minutes, which revealed that the world’s most powerful central bank is now facing a dilemma in taming inflation while averting recession.

On Wednesday, the dollar reversed gains, in an immediate reaction to a cautious shift in the Fed’s tone on policy guidance. The minutes hinted at a likely slow down in the pace of tightening amid mounting risks to economic growth. The US Treasury yields extended their previous advance amid recession fears while Wall Street indices tumbled.

Meanwhile, the euro bore the brunt of the downward revision to the Eurozone Q2 GDP print, which came in at 0.6% vs. 0.7% booked in the first estimate. Additionally, the deepening energy crisis in the old continent, thanks to the Russia-Ukraine war and excessive heatwave that has dried up the Rhine river in Germany.

The cargoes carrying coal, food supplies, etc. have been cut down ever since the water level in the Rhine fell below the critical 40 cm level. Markets are expecting the water level to rise above that level during the weekend, which could bring some relief to the shared currency.

Looking ahead, the Eurozone final inflation, US weekly Jobless claims and the speeches by the Fed and ECB policymakers will be closely followed for fresh trading impetus in the main currency pair.

“In the 4-hour chart, the risk remains skewed to the downside. The pair is developing below all of its moving averages, with the 20 SMA heading firmly south and crossing below the longer ones. Technical indicators, in the meantime, recovered from their intraday lows but remain below their midlines. Support levels: 1.0150 1.0105 1.0070. Resistance levels: 1.0205 1.0240 1.0280,” FXStreet’s Chief Analyst Valeria Bednarik explains.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0176 at the time of writing. Pair opened at 1.018 and is trading with a change of -0.01 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.0211, 50 SMA 1.0297, 100 SMA @ 1.0498 and 200 SMA @ 1.0875.

The previous day high was 1.0203 while the previous day low was 1.0146. The daily 38.2% Fib levels comes at 1.0181, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0167, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.015, 1.0119, 1.0092
• Pivot resistance is noted at 1.0207, 1.0234, 1.0265

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