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EUR/USD attempts a tepid-bounce from 50-DMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 17, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - The EUR bears took a breather from the overnight downslide, pushing EUR/USD slightly off lows as we progress towards the early Europe.

    EUR/USD hovers around 1.0950

    Currently, the EUR/USD pair drops -0.59 to 1.0850, retreating slightly from fresh weekly lows struck at 1.0833. The main currency pair remains pressured, although attempts a minor recovery towards the mid-point of 1.08 handle after fresh bids emerged near 50-DMA at 1.0835, offering some respite to the EUR bulls.
    The major remains deep in the red and now stalls the decline in anticipation of a renewed bout of selling once the European traders hit their desks, reacting to the Fed rate hike decision.

    On Wednesday, the Fed raised the target range for the Fed funds rate for the first time in almost a decade by 25bps, with the Dots chart remaining steady from September’s and pointed towards four hikes next year. The Fed’s rate hike decision further fanned the divergence between the monetary policy outlooks between both continents and weighed heavily on the EUR/USD pair.

    Looking ahead, markets now await German Ifo along with Philly Fed’s manufacturing index and weekly jobless claims for fresh incentives on the major.

    EUR/USD Technical Levels

    The pair extends losses, with the immediate support placed at 1.0835/33 (50-DMA/ daily low), below which 1.0800 (round number) could be tested. On the flip side, the immediate resistance is seen at 1.0907 (1h 20-SMA). A break beyond the last, doors will open for a test of 1.0959 (1h 100-SMA).

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