EUR/USD trades better bid above the 1.10 handle ahead of the European open, having defended the last on several occasions in the overnight trades, Bears now await the key US inflation report and Federal Reserve (Fed) Chair Powell’s testimony for the next push lower.
The spot is seen somewhat benefitting from a pause in the broad-based US dollar rally after the US President Trump’s latest comments failed to offer any fresh details on the US-China trade deal while increasing the trade anxiety.
Despite the tepid bounce, EUR/USD remains vulnerable and risks falling below the 1.1000 level, tracking the weakness in the Chinese Yuan vs. the US dollar, as the trade uncertainty led China economic slowdown fears continue to weigh heavily on the Chinese currency. Note that China is Europe’s biggest export market and the bloc’s remains at a competitive disadvantage should the Yuan depreciate.
Ahead of the US inflation report, the German Final CPI figures, Eurozone Industrial Production data, and trade developments could offer some trading impetus to the prices. However, the main event risk for Wednesday remains Powell’s testimony on the economic outlook before the congressional Joint Economic Committee at 1600 GMT.
EUR/USD LONG (Buy)
ENTER AT: 1.1014