EUR/USD erases gains and hits daily lows under 1.1720
- US dollar gains momentum as US stocks turn negative.
- EUR/SUD finds resistance at 1.1750, bounced to the downside looking at 1.1700.
- FOMC meeting starts, the decision on Wednesday could trigger volatility.
The EUR/USD found resistance below 1.1750 and tuned to the downside. During the last hour, the pair printed a fresh daily low at 1.1716. The move lower took place as Wall Street turned red and amid a stronger US dollar.
The deterioration in market sentiment boosted the yen and the dollar. The Dow Jones failed to hold to gains and is down by 0.05%, and the Nasdaq drops 0.01%. Concerns about the impact of the Evergrande situation weigh on the market. The company missed payments to two banks on Monday.
On Tuesday, economic data from the US came in above expectations, with housing starts and building permits rising unexpectedly. Attention is focused on the Federal Reserve's two-day meeting. On Wednesday, the central bank will announce its decision. No change in rates is expected. The expectations around the QE program will be the key.
EUR/USD unable to recover 1.1750
The pair peaked at 1.1748 on Tuesday, before turning to the downside. While under the 20-hour moving average at 1.1730, the intraday bias will be biased lower. The next critical support is seen at 1.1700, which protects the August low at 1.1662.
The euro remains under pressure, and only a recovery above 1.1820 would alleviate the pressure. In the very short-term, above 1.1730, the euro could again rise to test 1.1750; above the next resistance may be located at 1.1780.
Technical levels