EURUSD turned lower on Wednesday after a short-term rise yesterday. The pair still struggles to hold above the 1.10 handle as the 1.1225 intermediate resistance caps the bullish attempts after a rejection from 1.1075 last week.
On Tuesday, the common currency derived some support from slightly better-than-expected German IFO data coupled with a modest pullback in the greenback across the board. In particular, business climate improved to 94.6 in September as compared to 94.3 in the previous month. Current assessment rose to 98.5 from 97.4, while business expectation index eased to 90.8.
However, the risk sentiment deteriorated amid renewed trade pessimism, so the euro’s uptick lacked any follow-through. Today, the USD demand picked up, which fueled the pair’s retreat, along with other major currencies. The broader picture shows that the bearish outlook remains intact as the prevailing risk-off sentiment and further signs of a recession in Germany will put further downside pressure on the common currency.