Bounce From $1.1700 Intact

EUR/USD added 10 pips overnight, with the DXY coming under some light pressure as e-minis extended their late Monday bounce. The rate is last dealing at $1.1735, sticking to a sub-20 pip range.

• The rate managed to form a base at $1.1700 on Monday, which aided the broader pullback from the DXY's intraday intraday peak after the widespread defensive flows on worry surrounding China Evergrande weighed on broader risk appetite and supported the USD ahead of NY hours.
• Our technical analyst has noted that EUR/USD maintains a bearish position and traded lower yesterday as the bear cycle extended. Yesterday's weakness resulted in a breach of $1.1722, a 76.4% Fibonacci retracement. This opens the way to key support at the Aug 20 low and an important bear trigger ($1.1664). A break would strengthen the medium-term bearish case. Initial firm resistance has been defined at the Sep 14 high ($1.1846).
• There isn't anything in the way of nearby notable FX option expiries to be concerned with come the end of today's 10AM NY cut.
• Comments from ECB Vice President de Guindos headline the broader European docket on Tuesday, although they will come at the FT conference on financial stability, so there may not be much re: monetary policy in that address.