The EUR/USD is looking to build out a floor on Tuesday, down a scant 0.18% for the day's market session as Euro (EUR) bulls try to find a foothold heading into Wednesday's data dump. The pair is trading near 1.0470 as broad-market USD support remains high.
Early Wednesday will see European Producer Price Index (PPI) and Retail Sales figures for the month of August; the annualized EU PPI for August is expected to steepen its contraction from -7.6% to -11.6%, while Retail Sales for the same period are also forecast to decline, from -1% to -1.2%.
Wednesday will also bring US Services Purchasing Manager Index (PMI) figures, with September's PMI slated to printed a mild downtick from 54.5 to 53.6.
The window of Dollar strength should mean EUR/USD moving close to parity – MUFG
The European Central Bank (ECB) is firmly off their rate hike cycle, and markets are broadly expecting that no meaningful rate increases will be coming from the ECB for the foreseeable future.
On the US side, the Federal Reserve (Fed) is seeing inflation easing in the US domestic economy, but only slightly, and any upticks in price growth data could see the Fed set for further rate hikes moving forward.
With the rate differential between the Euro and the US Dollar set on the high side, USD strength versus the Euro could be the ongoing trend moving forward.
The Euro remains steeply off the year's highs, down over 7% from the July peak near 1.275 as the EUR/USD continues its trending tumble towards parity.
A descending trendline from the year's high remains firmly in place, and price action continues to slump far below the 200-day Simple Moving Average (SMA) near 1.0825.
The EUR/USD is still well above its 2002 lows just north of 0.9500, but little technical resistance remains if short-sellers are able to push the Euro further down into lows that the pair hasn't seen in over twelve months.

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