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EUR/USD: Recovery mode intact, tests 1.0650

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 18, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - EUR/USD failed to breach Tuesday’s low near 1.0630 and jumped off higher in early Europe, now extending recovery towards the mid-point of 1.06 handle.

    Fed minutes to add further downside pressure on EUR/USD?

    Currently, the EUR/USD pair trades 0.07% higher at fresh session highs of 1.0651, bouncing-off seven-month lows reached in mid-Asia at 1.0631. The shared currency attempts a minor recovery as we progress towards the European open, as the greenback corrects lower after a 3-day upsurge.

    The US dollar climbed to fresh seven-month high against its six major peers on Tuesday, as markets continue to believe that Dec Fed rate hike is imminent, especially after the recent US employment and inflation data.

    While the offered tone on the EUR keeps increasing day-after-day as the Dec 3 ECB meeting closes in, with wide expectations of further QE or deposit rate cut by the central bank in a bid to spur anaemic growth in the Eurozone and thereby restore investor confidence in wake of weekend’s Paris terror attacks.

    Looking ahead, there is nothing significant in terms of economic news to be published during the European session. Hence, the focus remains on the FOMC minutes for further cues on Dec Fed lift-off.

    EUR/USD Technical Levels

    The pair retraces from seven-month lows posted at 1.0631, with the next hurdle in sight is located at 1.0691 (Nov 17 High/ 5-DMA) and from there to 1.0715 (daily R2) . While the immediate support is seen at 1.0600 (round number). Selling pressure will intensify below the last, dragging the pair towards 1.0519 (April Lows).
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