Euro retreats on Eurozone sentiment, ECB, trade tariffs

The EURUSD pair is trading lower on Wednesday, giving away some gains following a 1.3% rally over the last three days. Investor concerns focus on the lack of progress in trade negotiations between the US and the European Union, with one eye on the Eurozone Consumer Sentiment Index release and Thursday’s ECB decision.

The Euro retreated from two-week highs of 1.1760 against the dollar on Tuesday and is trading around 1.1730 in the European session on Wednesday. The immediate trend, however, remains positive after having bounced from last week’s lows at 1.1555, with downside attempts held above a previous resistance at 1.1720.

Risk appetite returned following the announcement of a trade deal between the US and Japan, but is failing to support the Euro. A trade agreement between the EU and US remains elusive, and this is keeping investors on edge.

EU representatives will be flying to Washington on Wednesday in an attempt to secure a deal, but the bloc is studying retaliatory measures in case the negotiations fail.

The preliminary European Commission’s Consumer Sentiment Index for July will be the main release on Wednesday. The highlight of the week, however, will be the European Central Bank’s monetary policy decision on Thursday, which is expected to provide some clues about the bank’s near-term policy plans and the Eurozone’s economic outlook.

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