The euro to US dollar exchange rate has faced good support after touching the late-June bottom at 1.1530 yesterday. The rate has become somewhat balanced again and started offsetting some losses. In this situation, traders become active seeing the price coming to the 1.15 handle, which is the key line for the bears. If the rate falls below this line, the euro will face problems and can resume falling down to 1.13.
The exchange rate is still mainly driven by the mood of the US dollar players. Specifically, the markets have recovered from the hit of new development of the US-China trade issue. As a result, demand for the risk is rebounding. At present, better investors sentiments affected the greenback which usually soars during the escalation of US-China conflict.
This week is unlikely to bring significant reports, so the market sentiments may be among the key drives till the end of the week. Meanwhile, the euro can be depressed by the reports in Italy – the government considers an increase in state spending and expansion of the budget deficit.
The euro to US dollar rate still can go downwards. For now, the rate has exceeded 1.16, and stable upward movement may support the short-term outlook and push the rate to 1.1660, the line of 20-day moving average. This scenario can take place in case of the session closure above 1.16.