EUR/USD refreshes nine-month low below 1.1700 as DXY challenges yearly top

• EUR/USD remains pressured around 2021 low, ignores previous day’s Doji signal.
• Risk-off mood puts a safe-haven bid under the US dollar, virus woes, FOMC minutes are to blame the most.
• Second-tier US data to decorate calendar, risk catalysts are the key to follow for fresh impulse.

EUR/USD drops to the fresh low since November 2020 of 1.1684, down 0.17% intraday around 1.1690 by the press time of early Thursday.

Although mixed clues from the July Federal Open Market Committee (FOMC) Minutes pulled the major currency off from a multi-day low during late Wednesday, the US Dollar Index (DXY) rally to fresh high since March, also the yearly top, recently weigh on the quote.

The worsening Delta covid variant woes propel the DXY breakout of double-top formation around 93.20, currently up 0.15% on a day around 93.30, which in turn favors EUR/USD sellers.

While portraying the covid fears, Reuters said, “The United States leads the world in reported COVID-19 cases and deaths. Daily U.S. cases soared from fewer than 10,000 in early July to more than 150,000 in August as the Delta variant took hold.”

It’s worth observing that the FOMC minutes shed the rate hike concerns, despite supporting the tapering, while also conveying the dissatisfaction of employment recovery among the policymakers. The same should have favored the USD on the second readings. Additionally, mixed housing data from the US and no major change to the EU inflation figures, versus the initial forecasts for July, also back the pair bears.

Amid these plays, the US 10-year Treasury yields drop 1.3 basis points (bps) while the S&P 500 Futures struggle for a clear direction.

Moving on, the European calendar seems quiet but weekly prints of the US Jobless Claims and monthly Philadelphia Fed Manufacturing Index for July may offer short-term direction. However, major attention will be given to the qualitative catalysts, mainly concerning the coronavirus and the Fed, for a clearer view.

Technical analysis

A daily closing below the downward sloping trend line from July, around 1.1685, becomes necessary for EUR/USD bears to keep the reins. However, a fortnight-long resistance line and 20-DMA, respectively around 1.1760 and 1.1790, restrict short-term recovery of the EUR/USD prices.