- The EUR/USD fell to 1.1320 in Asia - the lowest level since July 2017.
- Chinese yuan (CNY) fell to new trend low of 6.9068, triggering a broad-based USD rally.
- The sell-off in the EUR is now looking overstretched. The hourly RSI is creating a bullish divergence.
The Chinese yuan (CNY) fell to a new trend low of 6.9068 per US dollar in Asia, leading to a broad-based USD rally.
As a result, the EUR/USD fell to 13-month low of 1.1320, bolstering the already bearish technical setup: the common currency suffered a pennant breakdown earlier this month and closed yesterday below the all-important 200-week moving average support of 1.1356.
Hence, it seems safe to say the bears are in control and the EUR could soon drop to 1.13.
However, the 14-day relative strength index (RSI) is reporting oversold conditions. Meanwhile, the hourly relative strength index (RSI) is creating a bullish divergence. Thus, bearish momentum could wane in the next few hours.
On the data front, the US July retail sales are scheduled for release at 12:30 GMT. A better-than-expected print would only add to the bearish pressure around the EUR. On the other hand, a weak reading could help the oversold EUR regain some poise. The EUR pairs could also turn volatile during Bundesbank President Jens Weidmann's speech, scheduled at 16:00 GMT.
EUR/USD Technical Levels
Resistance: 1.1360 (200-week moving average), 1.14 (psychological level), 1.1433 (Monday's high)
Support: 1.1312 (July 5 low), 1.1285 (June 2 low), 1.1187 (61.8 percent Fibonacci retracement the rally from 1.0340 to 1.2556)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD defends 0.6400 after Chinese data dump
AUD/USD has found fresh buyers near 0.6400, hanging near YTD lows after strong China's Q1 GDP data. However, the further upside appears elusive amid weak Chinese activity data and sustained US Dollar demand. Focus shifts to US data, Fedspeak.
USD/JPY stands tall near multi-decade high near 154.50
USD/JPY keeps its range near multi-decade highs of 154.45 in the Asian session on Tuesday. The hawkish Fed expectations overshadow the BoJ's uncertain rate outlook and underpin the US Dollar at the Japanese Yen's expense. The pair stands resilient to the Japanese verbal intervention.
Gold: Buyers take a breather below $2,400 amid easing geopolitical tensions
Gold price is catching a breath below $2,400 in Asian trading on Tuesday, having risen over 1% in the US last session even on a solid US Retail Sales report, which powered the US Dollar through the roof. Easing Middle East geopolitical tensions and strong Chinese data could cap Gold's upside.
SOL primed for a breakout as it completes a rounding bottom pattern
Solana price has conformed to the broader market crash, following in the steps of Bitcoin price that remains in the red below the $65,000 threshold. For SOL, however, the sensational altcoin could have a big move in store.
Israel-Iran military conflict views and takeaways
Iran's retaliatory strike on Israel is an escalation of Middle East tensions, but not necessarily a pre-cursor to broader regional conflict. Events over the past few weeks in the Middle East, more specifically this past weekend, reinforce that the global geopolitical landscape remains tense.