EUR/USD erased much of its overnight gains during New York trading as the dollar rebounded, while influences from U.S. and China data as well as technicals could keep downside risks elevated.
Downside surprises to China's August industrial output and retail sales data nL4N2QH0XZ sowed investor doubts about the world's second largest economy, which euro zone is highly dependent on, that already faces risks from China's property sector.
The New York Fed's Empire State index rose dramatically from July and was well above estimates nN9N2NL01Q.
The data drove U.S. rates US10YT=RREDZ2 and the dollar higher.
Technicals highlight downside risks.
September's monthly gravestone doji candle implies bears are in control.
The 10-day moving average reinforced resistance near 1.1850 and helps to cap EUR/USD rallies.
Recent long upper and lower wicks on daily candles suggest EUR/USD could be entering a consolidation phase, which would be a bearish sign.
IF EUR/USD longs fail to overcome key resistance near 1.1910 soon they're likely to throw in the towel and exit their positions.
EUR/USD is then likely to retest the 38.2% Fibo of the 1.0636-1.2349 rally as well as the August monthly low at 1.1664.
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