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EUR/USD rebounds sharply to 1.1135 on ECB’s Draghi

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 4, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    A renewed bout of buying-wave hit the EUR over the last on the back of ECB President Draghi’s comments, driving EUR/USD almost 60-pips higher and way beyond 1.11 handle.

    EUR/USD eyes Wednesday’s highs

    Currently, EUR/USD trades 0.28% higher at fresh session highs of 1.1136, quickly reversing a dip to session lows at 1.1070. The main currency pair caught a fresh bid tone and swung back higher above 1.11 handle as the ECB Chief Draghi’s motivational speech to fight low inflation rescued the EUR bulls from lows.

    Draghi noted in his speech, “if we do not surrender to low inflation – and we certainly do not - inflation will return to levels consistent with our objective.” He further added that “even in the face of common global shocks, central banks have the ability to deliver their mandates.”

    However, upside looks restricted mainly on the back of renewed risk-on wave hitting the markets as the European stocks join the global rally. Looking ahead, attention now shifts towards the US jobless claims and factory orders data, in absence of major significant macro news in the EUR calendar.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance is seen at 1.1145/50 (Feb 3 High/ round number). A break beyond the last, doors will open for a test of 1.1192/1.1200 (daily R1/ psychological levels). On the flip side, the immediate support is placed at 1.1036/27 (1h 20-SMA/ 200-DMA) below which 1.0987/77 (Jan 15 & 20 High) could be tested.
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