EUR/USD probably won't get much of a boost from today's surprisingly weak U.S. housing data, with dollar bulls likely to use the event as an opportunity to buy the greenback on the dip. Fed chief Powell's upbeat congressional testimony and signal of continued gradual monetary tightening has buoyed rates and left the market expecting them to remain elevated.
That should keep the dollar's significant yield advantage over euro intact and temper any EUR/USD gains, especially since expected incremental ECB rate hikes aren't likely until summer of 2019 at the earliest.
Technicals should also help limit EUR/USD bounces.
The pair now trades below the bearishly aligned 10, 21 and 55-DMAs as well as the daily cloud base while falling RSIs provide a stiffer tailwind for EUR/USD bears.
Any dip in the dollar will be seen as an opportunity for EUR/USD bears to get short as a test of June's low and large 1.1500 seems very likely.
chart: Click here