EUR/USD holding on to daily gains near mid-1.0700s
|The EUR/USD pair failed to break through Friday's multi-week highs resistance and has now retreated back to mid-1.0700s during early NA session.
Spot once again ran through some offers near 1.0780 region, amid modest greenback recovery. In fact, the key US Dollar Index quickly reversed early dip to over 5-week lows, and recovered back above the key 100.00 psychological mark, and has been exclusive driver of the pair's movement on the first trading day of the week.
Meanwhile, hawkish comments from Chicago Fed President Charles Evans provide little bullish impetus for the greenback as it seems to have been negated by Minneapolis Fed Neel Kashkari's concerns over the Fed’s inflation forecasts and slack in the US labor market.
Fed’s inflation forecasts have been wrong – FOMC’s N.Kashkari
No relevant fundamental drivers, in-terms of any market moving economic releases, are due for release on Monday. Hence focus remains on the speech by Chicago Fed President Charles Evans, scheduled later during NY session, ahead of the US President Donald Trump's speech during early Asian session on Tuesday.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet notes, "the 4 hours chart shows that while the 20 SMA has extended below the current level, providing a dynamic support in the 1.0730 region, technical indicators keep retreating within positive territory, with the Momentum nearing its 100 level and the RSI indicator still near overbought readings, all of which maintains the risk towards the upside, but indicates limited buying interest at the time being. The price needs to break above the mentioned high to be able to extend its recovery up to 1.0820, the 50% retracement of the post-US election slump."
"The 1.0730 region, on the other hand, is the immediate support and the level to break to see the pair correcting further lower, although buying interest will likely surge on approaches to the 1.0700 level."
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