EUR/USD off-lows, re-takes 1.1750 amid negative equities

The EUR/USD pair stalled its retreat near 1.1730 region post-European open, as demand for the safe-haven Euro returned to the markets amid a renewed risk-off wave, spurred by tumbling European equities.

EUR/USD reverts to   5-DMA at 1.1752

Having failed to hold above 1.1750 levels, the spot extended its break lower to test 1.17 handle in early Europe. However, the bulls managed to find support near daily classic S3 of 1.1736, and hence, sent the rate back to test mid-1.17s.

The latest uptick in EUR/USD can be mainly attributed to intensifying risk-off moods, as investors fret over rising North Korean-US geopolitical tensions, dumping the risk assets such as Treasury yields, equities, oil etc. to seek safety in the Yen, gold and EUR. 

As a result, the US dollar stalled its rebound versus its main competitors, tracking the US yields lower across the curve. The greenback extended its Friday’s rebound in the Asian trades, as sentiment around the US politics improved, following controversial Trump’s adviser Bannon’s resignation.

Later this week, ECB President Draghi’s speech, German flash PMIs and ZEW surveys will provide fresh impetus to the Euro ahead of the Jackson Hole Symposium commencing on Thursday. In the meantime, the USD dynamics and risk trends will influence the pair in the session ahead.

EUR/USD Technical Set-up  

Slobodan Drvenica at Windsor Brokers Ltd noted: “The Euro moved lower in late Asian / early European hours, trading around the mid-point of 1.1662/1.1790 range, where the price was entrenched for the most of the last week’s trading. Daily studies show mixed signals, with 10/20SMA bear-cross (1.1765) weighing on near-term action, while the downside is supported by rising 30SMA (currently at 1.1685). Break of either hurdle is needed for initial direction signal.”