- US Dollar gains momentum as Wall Street turns red and despite lower US yields.
- EUR/USD finds resistance at 1.0965 and turns to the downside.
The EUR/USD pair reversed after hitting a fresh daily high and now is back into negative territory for the day as it trades at 1.0930/35. It rose from a new two-year low to 1.0967, but then pulled back.
The move off highs took place amid a stronger US Dollar and as equity prices in Wall Street erased daily gains after opening in positive amid trade talks optimism. The move lower in equity prices, according to some analysts, was attributed to the political drama in Washington. The latest headline shows that the House Intelligence Committee released the full complaint letter from the 'whistleblower' regarding Trump's concerning conversations with Ukraine.
Market participants mostly ignored US data. The final reading of Q2 GDP growth showed the economy expanded at 2.0% (unrevised), wholesale inventories in August rose 0.4%; initial jobless claims rose marginally to 213K last week and the best data was the 1.6% gain in August in pending home sales, surpassing expectations. US bond yields are modestly lower amid demand for safe-haven.
Looking again to multi-year lows
Again the EUR/USD found resistance under 1.0970 and is back below the 20-hour moving average, showing weakens. Another test of the 1.0920/25 area could be seen. A break lower would likely accelerate the decline leading to a test of 1.0900. Under the mentioned level, the next strong medium-term support is seen around the 1.0840 area.
On the upside, a recovery back above 1.0950 would remove some of the negative tone, above the next resistance lies around daily highs at 1.0965/70 (also September 23 low). Above the Euro will likely gain momentum and could rise to test the next resistance at 1.0985.
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