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EUR/USD: Recovery falters near 1.0880, Ifo in focus

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 17, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - The shared currency continues to struggle against its American counterpart in the European morning, with EUR/USD unable to take the recovery beyond 1.0880 region.

    EUR/USD holds above 1.0850 levels

    Currently, the EUR/USD pair drops -0.43 to 1.0863, having posted fresh session highs at 1.0877 last hours. The main currency pair continues to face tremendous selling pressure this session, with every attempt to the upside sold-off near 1.0873-80 zone since its bounce from 50-DMA located at 1.0835.

    Despite persistent broad based US dollar strength and the European stocks joining the global risk-on rally, the EUR/USD pair is seen fighting hard to recover lost ground and finds solid support at the mid-point of 1.08 handle, resisting near-term bearish pressures. The German DAX rallies +2.15%, the UK’s FTSE jumps +1.37% while the Euro Stoxx 50 rockets +2.10%.

    In the day ahead, the major is likely to maintain its offered tone as the monetary policy divergence between Fed and ECB is expected to weigh on investors’ mind after a Fed rate hike yesterday, pressuring the EUR to the downside. While markets now await the German Ifo surveys for fresh incentives on the major ahead of a slew of US macro releases later today.

    EUR/USD Technical Levels

    The pair halts recovery and finds the immediate support at 1.0835/33 (50-DMA/ daily low), below which 1.0800 (round number) could be tested. On the flip side, the immediate resistance is seen at 1.0895 (1h 20-SMA). A break beyond the last, doors will open for a test of 1.0956 (1h 100-SMA).

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