EUR/USD moves sideways near multi-month lows at mid-1.1700s
- EUR/USD remains on the back foot following last week's decline.
- US Dollar Index stays in a consolidation phase below 93.00.
- Fed commentary will be watched closely in the absence of significant data releases.
After falling sharply amid broad-based USD strength on Friday and closing the week in the negative territory, the EUR/USD pair stays relatively quiet on Monday. Currently, the pair, which touched its lowest level since late March at 1.1743, is trading virtually unchanged on the day at 1.1757.
On Friday, the impressive July labour market data from the US caused investors to start pricing a Fed asset tapering before the end of the year and provided a boost to the greenback. The US Dollar Index (DXY), which tracks the USD's performance against a basket of six major currencies, rose more than 5% and reached its highest level in two weeks at 92.92 during the Asian session on Monday. As of writing, the DXY is consolidating its gains around 92.80.
JOLTS Job Openings for June will be the only data featured in the US economic docket on Monday. More importantly, Atlanta Federal Reserve President Raphael Bostic and Richmond Federal Reserve President Thomas Barkin will be delivering speeches during the American trading hours. Investors will look for confirmation of the hawkish shift in the Fed's policy outlook.
EUR/USD near-term outlook
Economists at Société Générale think that EUR/USD could target 1.1700 with a decline below 1.1745/41 support zone.
"EUR/USD failed to maintain above short-term Moving Averages and struggled to cross 1.1900 last week. This has resulted in regain of downward momentum bringing the pair once again towards projections of 1.1745/1.1741," economists noted. "Signals of bounce are still not visible. Next support will be at March low of 1.1700."
Additional levels to watch for