The pair will likely continue falling as sellers target the first support of the standard pivot point at 1.0130.
Sell the EUR/USD pair and set a take-profit at 1.0100.Add a stop-loss at 1.0250.Timeline: 1-2 days.
Set a buy-stop at 1.0240 and a take-profit at 1.0350.Add a stop-loss at 1.0100.
The EUR/USD price continued its downward trend as tensions between the US and China continued. It dropped to a low of 1.0178, which was the lowest level since Thursday last week. The pair has dropped by more than 1.20% from its highest point this week.
EU Retail Sales and US Jobs
The EUR/USD pair continued dropping as tensions between the US and China continued following Nancy Pelosi’s visit to Taiwan. As a result, China launched several military maneuvers and missile launches around Taiwan’s strait.
Joe Biden’s administration has said that the US policy towards Taiwan had not changed. Still, there is a likelihood that the conflict between the two biggest economies will continue in the near term. Historically, the US dollar tends to gain in times of high uncertainty.
The EUR/USD price also retreated after the relatively weak US job openings data. According to the labor department, the number of job openings in the US stood at 10.7 million on June 30th. This was a sharp decline from the 11.3 million it recorded at the end of May.
The data came three days ahead of the official US jobs data. Analysts expect the numbers to reveal that hiring slowed in July as companies continued cutting costs. Companies like Walmart, Shopify, and Target have announced plans to reduce their workforce.
The next key catalyst for the pair will be the upcoming European retail sales data. Economists expect the bloc’s retail sales dropped from 0.2% in May to -1.7% in June as inflation rose. Retail sales are an important part of the economy since consumer spending is the biggest part.
The pair will also react to the latest services PMI numbers from the US and European countries. The US will also release factory and durable goods orders.
The four-hour chart shows that the EUR/USD pair faced a strong resistance level at 1.0276 last week. It struggled to move above that resistance point several times in July. Now, it has dropped below the standard pivot point and the 25-day and 50-day moving averages. The pair has also moved slightly above the 23.6% Fibonacci Retracement level.
Therefore, the pair will likely continue falling as sellers target the first support of the standard pivot point at 1.0130. A drop below that support will see the pair drop to the parity level again.
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