EUR/USD today: the pair maintains an upward dynamics on the weakness of the American dollar

EUR/USD opened a new week with movement near Friday highs, which was reached on the collapse of the US currency. Further growth of the euro against the US dollar is limited by overbought and the expectation of a correction.

Events for today:

• 11:00 – German data will be released: German business expectations index (Aug), German current assessment (Aug) and German IFO business climate index (Aug).
• 15:30 – the US data will be released: nondefense capital goods shipments (excluding aircraft) (m/m), core durable goods orders (m/m) (July) and durable goods orders (m/m) (July).

The aggravated risks of a trade war are the main driver of the market at the beginning of the week. Amid them, the demand for safe haven assets has increased significantly. And given the uncertainty of the Fed regarding monetary policy, the US currency acts more as a risky asset.

The EUR/USD pair maintains an upward dynamics on the growth of negative sentiment associated with the trade confrontation and the weakness of the American dollar. But it is worth noting that despite the risks, the growth of the euro against the US dollar is limited. The limiting factor is the oversold of the American dollar and resistance levels: 1.1160-80. As a result, from these levels we can expect the formation of a reversal with a further decrease.

Read also: “The results of the July Fed meeting for the market”

Hanzenko Anton

Earn with the help of the trade service on the news Erste News!

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