EUR/USD Recovered From A Fresh Three-Month Low, The Risk Remains Skewed To The Downside

EUR/USD Current Price: 1.1832

• US Federal Reserve chief Powell said that acting prematurely on inflation would be a mistake.
• EU Industrial Production contracted in May, reflecting the slowing economic recovery.
• EUR/USD recovered from a fresh three-month low, the risk remains skewed to the downside.

The dollar fell against all of its major rivals, although EUR/USD recovery has been moderated. The pair topped for the day at 1.1835, trading nearby at the end of the American session. The greenback got hit by comments from US Federal Reserve Chair Jerome Powell. In his Semi-Annual Monetary Policy Report’s testimony, Powell maintained a dovish stance. He said that the central bank would deliver powerful support until the economic recovery is complete. He added that inflation is expected to remain elevated in the upcoming months before easing. And acting prematurely would be a mistake.

The EU published May Industrial Production, which contracted 1% MoM and rose 20.5% YoY, missing the market’s expectations. The US has just published the June Producer Price Index, which rose 7.3% YoY, beating the market’s expectations. The US will publish the July NY Empire State Manufacturing Index, weekly unemployment claims, and June Industrial Production.

EUR/USD short-term technical outlook

The EUR/USD pair trades near the daily high heading into the Asian opening, although its near-term bullish potential is limited. The 4-hour chart shows that a mildly bearish 20 SMA capped advances, still developing below the longer ones. Technical indicators recovered from intraday lows but lost their upward strength within just below their midlines. The risk remains skewed to the downside as long as it holds below 1.1920, a static Fibonacci resistance level.

Support levels: 1.1780 1.1735 1.1690

Resistance levels: 1.1835 1.1880 1.1920 

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