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EUR/USD off highs, returns to 1.0840

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Edinburgh) - After bottoming out near 1.0810, EUR/USD has now rebounded to the 1.0835/40 band ahead of the NA session.

    EUR/USD weaker on ECB, PMIs

    The single currency is still trading under the sedative effects of Draghi’s dovish press conference after the ECB meeting on Thursday. In addition, spot has met further downside pressure after flash manufacturing PMIs in the euro area have missed expectations for the current month.

    Furthermore, the ECB has released its Survey of Professional Forecasters (SPF), emphasizing that inflation expectations are now seen at 0.7% in 2016, down from 1.0%; regarding GDP, expectations remain at 1.7-1.8% while unemployment is expected to grind lower.

    At his speech in the WEF in Davos, President M.Draghi sounded in line with yesterday’s press conference, having no impact on spot.

    EUR/USD levels to watch

    The pair is retreating 0.44% at 1.0839 with the immediate support at 1.0777 (post-ECB low Jan.21) followed by 1.0737 (38.2% Fibo of 1.0538-1.1059) and finally 1.0709 (low Jan.5). On the flip side, a break above 1.0877 (20-day sma) would target 1.0991 (100-day sma) en route to 1.1059 (high Dec.15).
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