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EUR/USD holds above hourly 100-SMA in early Europe

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - A renewed rally seen in the EUR/USD during mid-Asia fizzled at 20-DMA and the prices now consolidate in a slim range amidst falling stock markets as well as oil prices.

    EUR/USD capped below 1.0900

    Currently, the EUR/USD pair trades 0.12% at 1.0879, retracing from fresh session highs reached at 1.0890 in last hours, where the 20-DMA intersects. The main currency pair consolidates to the upside, as the bulls gather pace for a decisive break above 1.09 barrier, as persisting risk-off moods continue to underpin the funding currency EUR. The Chinese benchmark, the Shanghai Composite is down -2.66%, while the US oil is losing nearly -2%.

    Moreover, the recovery the EUR/USD pair is seen more of a corrective rally after common currency slumped more than 1 big figure following the release of ECB minutes. The ECB account of the Dec 3 meeting turned out more dovish, with most policy makers favouring a bigger (20bps) depo rate cut. While the central bank also sees more room for further easing in wake of weaker inflation and growth outlook.

    Amid a lack of first-tier macro news from the Euro land, focus will remain on the second-liner trade balance figures. While a host of US macro data, including the crucial retail sales, industrial production and consumer sentiment, will be also watched for fresh cues on the USD.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance is seen at 1.0890/1.0900 (20-DMA/ round number). A break beyond the last, doors will open for a test of 1.0960/69 (200-DMA/ Jan 11 High). On the flip side, the immediate support is placed at 1.0844/ 37 (1h 200-SMA/ 50-DMA), below which 1.0801/00 (Jan 8 Low/ psychological levels) could be tested.
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