EUR/USD advances towards 1.1750 amid notable USD supply, ahead of PMIs

EUR/USD is looking to extend its recovery from nine-month troughs towards 1.1750, as the selling pressure around the US dollar remains unabated amid a risk-friendly environment, starting out a big week.

The risk sentiment has turned in favor of the optimists, as the Fed’s Jackson Hole Symposium going virtual may have reduced the tapering expectation, reinforced by the FOMC July meeting’s minutes released last week. The upbeat market mood has taken the wind out of the recent US dollar rally.

Further, the covid vaccine optimism combined with Australia and New Zealand reviewing their covid strategies has given a sense of encouragement across the Asian traders amid rising Delta covid variant concerns.

Meanwhile, attention now shifts towards the Euro area Preliminary Manufacturing and Services PMI reports for fresh light on the bloc’s economic recovery. Later in the day, the US Markit PMIs will also hog some limelight ahead of the Durable Goods Orders data and Fed Symposium due later this week.

EUR/USD technical outlook

From a near-term technical perspective, EUR/USD’s daily chart shows that the bulls are heading towards the August 18 highs of 1.1742 on their recovery mode.

Buying interest is likely to accelerate above the latter calling for a test of the bearish 21-Daily Moving Average (DMA) at 1.1781.

The 14-day Relative Strength Index (RSI) is pointing north while below the midline, suggesting that the road to recovery could be bumpy.

EUR/USD: Daily chart

Alternatively, if the price faces rejection near 1.1750 levels, then the downside could resume towards the multi-month lows of 1.1664.

Ahead of that the 1.1700 round number could challenge the bearish commitments.

EUR/USD: Additional levels to consider