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EUR/USD fails to resist 1.09 as European stocks rally ahead of ECB

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - EUR/USD is currently seen reversing a spike to session highs and now loses 1.09 handle after the European stocks opened elevated and lifted the overall market sentiment.

    EUR/USD stalls recovery near 1.0920

    Currently, the EUR/USD pair trades modestly flat at 1.0892, unable to extend beyond 1.0921 daily highs. The main currency pair defends mild gains and slips back below 1.09 handle following higher European stocks on stabilizing oil prices, which fuel a fresh bout of risk-on trades into markets, thus, diminishing the safe-haven bids for the euro. Germany’s DAX rises 0.77%, the UK’s FTSE jumps 0.87%, while the pan-European benchmark index, the Euro Stoxx 50 rallies over 1%.

    Moreover, the upside in the EUR/USD pair remains short-lived as markets remain divided over ECB’s future course of monetary policy stance as we progress towards the ECB decision due later this session. As per market expectations, ECB would not be willing to signal the need for another deposit rate cut, and hence, disappointing markets; with EUR crosses likely to find some support post-decision.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance is seen at 1.0946/50 (100-DMA/ psychological levels). A break beyond the last, doors will open for a test of 1.1000 (round number). On the flip side, the immediate support is placed at 1.0862 (50-DMA), below which 1.0841/33 (daily S1/ Jan 14 Low) could be tested.
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