The Euro edged lower in Asia on Tuesday after previous day’s rally and close above 1.1800 barrier. The single currency came under pressure on comments from president Trump who said that US would stay on course on military support to Afghanistan that inflated US dollar. With negative impact on dollar over geopolitical tensions in the Korean peninsula fading, focus turns towards Trump’s plans for tax cut. Traders hope that president Trump could recover from political setback in the recent weeks and set the stage for tax cut plan after US Congress starts after summer break. Jackson Hole symposium is also in focus as the key event this week, with markets awaiting comments from two top central bankers, Fed chief Janet Yellen and ECB’s President Mario Draghi, for stronger signals about policies of central banks. Technical studies for the EURUSD pair remain bullish, with Monday’s break and close above bear trendline from 1.1910 peak, seen as bullish signal. Broken bear-trendline marks good support at 1.1776, followed by broken daily Tenkan-sen at 1.1754, above which extended downticks should find support to keep near-term bulls in play. Also, the pair is establishing above weekly 200SMA (1.1758) after showing hesitation to break it clearly in past three weeks. Weekly close above 200SMA will be an additional bullish signal. Release of German and EU ZEW economic sentiment data is the key release for Euro. Both indicators are forecasted lower in August (German 15.0 vs 17.5 and EU 34.2 vs 35.6) which would risk further Euro’s easing on release at / below forecasts.
Res: 1.1815, 1.1828, 1.1846, 1.1889
Sup: 1.1776, 1.1754, 1.1731, 1.1708