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EUR/USD takes-out 50-DMA, eyes Tuesday’s high

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - The EUR/USD pair extends its recovery mode from 1.0700 levels and remains on the bids for the second straight session, garnering support from the risk-aversion on China stocks slump and tumbling oil prices.

    EUR/USD extends beyond 1.0800

    Currently, the EUR/USD pair trades 0.42 higher at fresh session highs of 1.0825, finding good support near 1.0770 region, the confluence of daily pivot and hourly 50-SMA. The common currency continues to push higher into the green zone, bolstered by rising demand for safe-havens after the Chinese stock markets plunged to hit the 7% circuit breaker, refuelling renewed bout of risk-aversion across the financial markets.

    Adding to the risk-off sentiment persisting in Asia, oil prices also tracked the rout in the global equities and slumped to multi-year lows and weighed on the demand for risk currencies such as the USD. The greenback gauged by the US dollar index drops -0.26% to 99.02, and retreated sharply from one-month highs.

    More so, FOMC minutes reflected slightly dovish tilt, with the Fed official more concerned about low inflation levels, further aided the recovery in EUR/USD. In the day ahead, a slew of economic releases from the Euro zone will keep the traders busy ahead of the weekly jobless claims from the US due later today.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance is seen at 1.0840/57 (Jan 5 High/ 10-DMA). A break beyond the last, doors will open for a test of 1.0884/87 (1h 200-SMA/ 20-DMA). On the flip side, the immediate support is placed at 1.0775/66 (Daily Low/ pivot), below which 1.0718 (Jan 6 Low) could be tested.
    For more information, read our latest forex news.

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