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EUR/USD swings higher to 1.1270, risk-aversion deepens

FXStreet (Mumbai) - The EUR/USD pair extends its upward trajectory into the early European trades, brushing away a temporary drop seen on Friday, as worsening risk-sentiment triggered by China-led global equities sell-off favours the safe-haven status of the euro.

EUR/USD firmer above 1.1250

The EUR/USD pair trades 0.19% higher at 1.1265, having posted fresh four-day highs at 1.1271 levels some minutes ago. The bid tone around the EUR/USD pair keeps growing bigger as the increased demand for safe-haven assets amid wide-spread risk-aversion, sparked a fresh bout of buying interest for the euro.

EUR/USD keeps pushing and now targets the 1.13 handle as concerns over China slowdown resurfaced, with markets casting doubts over the global economic outlook, thus sending equities and commodities sharply lower across the globe.

Moreover, growing uncertainty over the timing of the Fed rate hike after the recent speeches by Fed officials also dampens the sentiment around the US dollar.

On Tuesday, New York Fed President Dudley and San Francisco Fed Chief Williams endorsed a rate-hike this year while Chicago Fed President Evans sounded more dovish and noted that the Fed should wait with the rate lift-off.

Later in the day, German CPI will be closely watched for further cues on the major while US consumer confidence data will be key for the USD moves. Also, the pair is likely to get influenced by the risk conditions dominating the markets.

EUR/USD Technical Levels

The pair has an immediate resistance at 1.1296 (Sept 24 High), above which gains could be extended to 1.1331 (Sept 21 High) levels. On the flip side, support is seen at 1.1200 (Psychological levels) below which it could extend losses to 1.1163 (Sept 24 Low) levels.

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