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Aug 16 - 01:55 PM

EUR/USD - COMMENT-EUR/USD's Payrolls Day High Eyed While Above Monday's Low

By Randolph Donney  —  Aug 16 - 11:39 AM

EUR/USD's rebound off the 1.1704/06 March-August double-bottom dipped to important support Monday and key U.S. data and Fed Chair Jerome Powell's speech on Tuesday should determine whether the rebound reaches resistance at 1.1834.

Monday's dip came as risk aversion flows narrowly favored the dollar, even though rising Bund-Treasury yield spreads supported EUR/USD amid souring U.S. data nL1N2PK12QnN9N2NL008 in the wake of the strong July jobs report nAPN077ZMP and less certainty regarding expected Fed tapering nW1N2P603K.

EUR/USD faces resistance from the 50% Fibo of its July-August dive at 1.18075 by Friday's 1.18045 high on EBS, but the Aug.
6 non-farm payrolls session high at 1.1834 is also the 161.8% Fibo off of August 6th's 1.1706-55 base.

Tuesday's data includes U.S. July retail sales and industrial production.
Retail sales are forecast to fall 0.2% after June's 0.6% rise and will only capture a portion of the increased Delta variant-driven restrictions and consumer response.
Wednesday's minutes from the July 27-28 FOMC meeting will similarly pre-date more recent indications of consumer and business pandemic angst.

EUR/USD's double-bottom is reinforced by oversold RSIs bullishly diverging, but prices need to close above the Aug.
6 high at 1.1834 to confirm a turn toward July's 1.1909 high.
And the ECB's expected Q4 tapering plans nL4N2PJ10N would have to hold up amid Chinese growth concerns nL1N2PN03I.

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Source:
Refinitiv IFR Research/Market Commentary

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