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EUR/USD catches fresh bid, revisits daily highs

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 27, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - The shared currency regains lost footing and recovers most losses against its American rival in mid-Asia, with EUR/USD extending its upbeat momentum for the third straight session.

    EUR/USD finds support from negative equities

    Currently, the EUR/USD pair trades almost unchanged at 1.0871, retesting daily highs posted in opening trades. The main currency pair found fresh bids near the mid-point of 1.08 handle and swung back higher as the sentiment soured amid falling oil prices as well as on extension of the sell-off in China stocks. The Shanghai Composite falls -2.80%, while the US oil drops nearly -3% and the Brent pares gain to trade +0.30%.

    In times of market unrest and uncertainties, investors prefer to park their funds in low-yielding/ safe currencies such as the euro. Moreover, it is widely anticipated that the Fed would take notice of the recent global market headwinds at its decision later tonight. Hence, markets have lowered their expectations of four Fed rate hikes this year, which is likely to keep the USD undermined and thus, support the upside in EUR/USD.

    Amid a lack of fresh fundamental triggers in the day ahead, the Fed decision will hog the limelight. Meanwhile, the sentiment on the global equities and oil markets will continue to drive markets.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance is seen at 1.0886/ 1.0900 (50-DMA/ round number). A break beyond the last, doors will open for a test of 1.0922/27 (Jan 21 High/ 100-DMA). On the flip side, the immediate support is placed at 1.0803 (Jan 13 Low), below which 1.0786/77 (Jan 25 & 21 Low) could be tested.
    For more information, read our latest forex news.

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