Weaker-than-expected economic data added to a more downbeat tone surrounding the common currency
The euro peaked just beyond the 1.1900 figure earlier in the day before retreating into negative territory during the European hours as the greenback trimmed some losses. The pair slipped to intraday lows around 1.1830 and was last seen clinging to the lower end of the trading range. The daily RSI is pointing marginally lower and was about to enter the oversold territory. As the common currency struggled at the 1.1900 barrier, another visit to the 1.1800 area remains on the cards. A break below 1.1830 would pave the way towards this support zone. On the upside, the immediate resistance now arrives at 1.1850, followed by the 1.1880 region.
On the data front, German factory orders plunged 3.7% in May, significantly below the 1.0% rise expected. Meanwhile, German ZEW headline numbers for July showed that the economic sentiment index worsened more than expected to 63.3 from 79.8 previous while missing estimates of 75.2. The Eurozone ZEW economic sentiment fell to 61.2 as compared to 81.3 previous and 84.4 expected. Commenting on the report, ZEW President Achim Wambach said that the economic development continues to normalize, and the situation indicator for Germany has clearly overcome the coronavirus-related decline.
Weaker-than-expected economic data added to a more downbeat tone surrounding the common currency. Later in the day, fresh reports out of the United States could provide additional clues.
Also, market focus is gradually shifting towards the FOMC meeting minutes due on Wednesday. The event could set a fresh direction for the greenback and thus affect dynamics in the EURUSD pair. The central bank could express a more hawkish view on the outlook for its monetary policy and the economic recovery. In this case, the dollar would rally across the board and thus put the common currency under selling pressure.
