Sellers now drag EUR/USD back to the 1.0230 region following an earlier bull run to the area just below 1.0300 the figure on Tuesday.

EUR/USD now trades on the defensive for the first time after four consecutive daily advances and following an unsuccessful attempt to retest the 1.0300 mark earlier in the session.

The re-emergence of the risk aversion lends support to the greenback and encourages the US Dollar Index (DXY) to make a U-turn and return to the positive territory following 4-week lows in the vicinity of the 105.00 yardstick.

The pair’s corrective move comes in tandem with the relentless downtrend in the German 10y Bund yields, this time retreating to levels last seen back in mid-April around the 0.68% zone.

In the domestic calendar, the Unemployment Change in Spain increased by 3.230K persons in July following June’s marked drop. Still in Spain, the Consumer Confidence gauge for the month of July is due later.

EUR/USD’s rebound came short of the 1.0300 region so far on Tuesday amidst a moderate recovery in the greenback, which appears in turn propped up by the re-emergence of the risk aversion.

Price action around the European currency, in the meantime, is expected to closely follow dollar dynamics, geopolitical concerns, fragmentation worries and the Fed-ECB divergence.

On the negatives for the single currency emerges the so far increasing speculation of a potential recession in the region, which looks propped up by dwindling sentiment readings among investors and the renewed downtrend in some fundamentals.

Key events in the euro area this week: Germany Balance of Trade, Final Services PMI (Wednesday) – Germany Construction PMI (Thursday).

Eminent issues on the back boiler: Continuation of the ECB hiking cycle. Italian elections in late September. Fragmentation risks amidst the ECB’s normalization of monetary conditions. Impact of the war in Ukraine on the region’s growth prospects and inflation.

So far, spot is retreating 0.20% at 1.0240 and faces the next support at 1.0096 (weekly low July 26) seconded by 1.0000 (psychological level) and finally 0.9952 (2022 low July 14). On the upside, a breakout of 1.0293 (monthly high August 2) would target 1.0423 (55-day SMA) en route to 1.0615 (weekly high June 27).

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EUR/USD came under heavy bearish pressure and dropped toward 1.0150 in the American session on Friday. The data from the US showed that Nonfarm Payrolls rose by 528K in July, compared to the market expectation of 250K, and provided a boost to the greenback.

GBP/USD declined sharply toward 1.2000 on Friday after the impressive US July jobs report triggered a dollar rally. Nonfarm Payrolls grew at a much stronger pace than expected and annual wage inflation stayed unchanged at 5.2%, reviving hawkish Fed bets.

Gold turned south in the second half of the day on Friday and fell toward $1,770. After the US data showed Nonfarm Payrolls rose by 528,000 in July, the benchmark 10-year US Treasury bond yield gained more than 6%, weighing heavily on XAU/USD.

Cardano price is ready to rally after triggering the same pattern for the fourth time in the last two months. This development could provide buyers and traders with a quick and easy setup to capitalize on.

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