The EUR/USD dropped on Tuesday, posting the lowest daily close since mid-June. The pair peaked at 1.0930 and then turned downwards, erasing the two-da
y recovery in a few hours. This reflects that the pair remains under pressure, primarily due to a strong US Dollar.
In June, the current account balance in the Eurozone surged to a surplus of €35.8 billion, reflecting a decline in imports driven by lower energy prices. On Wednesday, the preliminary August PMI readings are expected. The composite index for the Eurozone is projected to decline slightly from 48.6 to 48.5, with both manufacturing and service PMIs falling marginally from July's readings. recently posted its highest daily close since June, above 103.50.
The cautious tone across financial markets is another factor supporting the US Dollar. Concerns about the Chinese economy and a gloomy economic outlook in Europe contrast with a robust US economy. Attention is focused on the , with Federal Reserve Chair Powell and European Central Bank President Lagarde scheduled to speak on Friday.The EUR/USD approached the 20-day Simple Moving Average and turned downwards. The decline found support around the 1.0830 area, which also acted as a downside barrier in June and July. Below that, the next crucial level is the 200-day SMA at 1.0799.is holding below 1.0860 and putting pressure on the 1.0830 support area. Further losses are likely to target 1.0800. A recovery above 1.
Technical indicators on the 4-hour chart do not show strong conviction for a move, as the Relative Strength Index is flat near 30 and momentum is flattening below midlines. However, as long as the price remains below 1.0860, the downward pressure is likely to persist.
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