EUR/USD attempts tepid-recovery on 1.0600, will it last?
|The bears have taken a breather in early Europe, allowing a tepid-recovery in from dovish ECB stance-induced massive slide.
EUR/USD bounces-off a dip below 1.06 handle
Currently, EUR/USD recovers losses to now trade around 1.0615 levels, retreating from four-day lows of 1.0589 reached earlier on the day. After a brief period of downside consolidation seen overnight, the main currency pair ran into fresh offers at Tokyo open as the Asian traders reacted negatively to the ECB’s dovish move at its policy meeting yesterday. The ECB reduced the pace of its asset purchases to EUR 60bln, although extended its asset buying program until at least Dec 2017.
The recovery in the major looks short-lived as the common currency is expected to remain under pressure going ahead, especially with the latest ECB outcome underscoring the divergence between Fed and ECB monetary policy outlooks. The Fed is highly anticipated to hike rates at its meeting next week, and will remain on course for further rate rises next year.
EUR/USD Technical Levels
In terms of technicals, the pair finds the immediate resistance 1.0629 (20-DMA). A break beyond the last, doors will open for a test of 1.0661 (10-DMA) and from there to 1.0693 (5-DMA). On the flip side, the immediate support is placed at 1.0589 (4-day low) below which 1.0551 (Nov 30 low) and 1.0515 (Nov 24 low) could be tested.
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