EUR/USD side-lined near 1.0870, awaits fresh impetus
|A calm has spread across the EUR markets on Tuesday, as the bulls continue to consolidate yesterday’s massive rally, keeping EUR/USD largely flat-lined in the familiar range near 1.0865/70 region.
The spot is seen gathering pace for next leg higher, as the political uncertainty around the French election fades and attention turns towards the US tax reform plans announcement due tomorrow by the US President Trump.
Markets believe that Wednesday’s US tax reforms announcement is likely to lack details on yet another occasion, which could be used as an excuse to sell-off USD longs.
Moreover, renewed concerns over the North Korean issue combined with increased odds of a Macron win in the French would continue to keep the sentiment buoyed around the common currency.
Markets now brace for the ECB policy decision due this Thursday, with hints on a QE taper likely to provide extra legs to the recent bullish tone in EUR/USD. In the meantime, the US consumer confidence and new home sales data due today will be eyed for some fresh cues.
EUR/USD Technical Levels
Technical resistances for the pair are aligned at 1.0900/20 (round number/ multi-month tops), 1.0946/50 (Fib R2/ psychological levels) and finally 1.1000 (key resistance). On the flip side, the spot finds next support at 1.0811 (5-DMA), a break below that level could open the door to 1.0757 (classic S2/ Fib S3) and 1.0736 (10-DMA).
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