EUR/USD loses momentum and challenges 1.1800

• EUR/USD has started Wednesday’s session on the back footing.
• Risk-off mood prevails despite news in the US-China trade front.
• US Durable Goods Orders next of relevance in the calendar.

EUR/USD is fading part of Tuesday’s advance to the mid-1.1800s, although it has so far met decent contention near the 1.1800 mark.

EUR/USD looks to risk trends

EUR/USD is prolonging the erratic performance so far this week, with clear support in the 1.1780 region and gains limited in the vicinity of 1.1850.

Auspicious news on the US-China protracted trade war lent support to the risk-associated universe in the first half of the week, although the up move lacked follow through and eventually failed in the mid-1.1800s.

There are no changes in the broad macro scenario, where progress in the US-China ‘Phase One’ deal taking centre stage once again and relegating somewhat the uncertainty stemming from the US political arena.

Data wise in Euroland, France’s Consumer Confidence remained at 94 for the current month. Across the pond, MBA’s Mortgage Applications is coming up next seconded by the more relevant Durable Goods Orders.

What to look for around EUR

EUR/USD is now facing some consolidation after hitting fresh tops near 1.1970 earlier in the month. The July-August rally, while largely triggered by broad-based dollar-selling and improved sentiment in the risk-associated universe, found extra sustain in auspicious results from domestic fundamentals - which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis – and US-China trade headlines. Also lending wings to the momentum around the euro appear the deal on the European Recovery Fund – which helped putting political fears within the bloc to rest (for now) – and the solid position of the current account in the region.

EUR/USD levels to watch

At the moment, the pair is losing 0.23% at 1.1807 and faces the next support at 1.1793 (weekly low Aug.21) seconded by 1.1695 (monthly low Aug.3) and finally 1.1495 (monthly high Mar.9). On the upside, a breakout of 1.1965 (2020 high Aug.18) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally).