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EUR/USD tests hourly 50-SMA on negative European equities

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

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - The bid tone around the EUR/USD pair keeps improving as we head into the European session, extending the recovery from post-Fed lows at 1.08 handle.

    EUR/USD eyes hourly 50-SMA at 1.0874

    Currently, the EUR/USD pair rises 0.37% to fresh session highs of 1.0869, heading for attest of hourly 50-SMA at 1.0874. The main currency pair caught a fresh bid tone after European stocks fell sharply at open, joining the lower oil-backed global sell-off. The German DAX drops nearly 1%, the UK FTSE loses -0.60% while the Euro Stoxx 50 declines over 1%.

    Moreover, the extension of broad based US dollar weakness into Europe also aids the recovery in the EUR/USD pair. Although from a wider perspective, the outlook for EUR/USD looks bearish on central bank’s policy divergence.

    Amid lack of first-tier economic updates, markets will track the European current account data ahead of the US flash services PMI report. Besides, FOMC member Lacker’s speech about the economic outlook for 2016 at the Charlotte Chamber of Commerce due later today is expected to grab a lot of attention.

    EUR/USD Technical Levels

    The pair attempts recovery and finds the immediate resistance is seen at 1.0903 (5-DMA). A break beyond the last, doors will open for a test of 1.0933/37 (1h 200-SMA/ 10-DMA). On the flip side, the immediate support at 1.0800 (round number), below which 1.0736 (daily S2) could be tested.
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