EUR/USD slides back closer to 3-week lows ahead of US CPI
| • Surrenders early modest recovery gains to 50-day SMA, turns lower.
• An uptick in US bond yields helps revive USD demand.
• US CPI eyed for some impetus ahead of the key FOMC decision.
The EUR/USD pair failed to build on its early tepid recovery move to 50-day SMA and has now dropped to fresh session lows, around the 1.1735-30 region.
The pair has now moved back closer to 3-week lows, touched in the previous session, and was being weighed down by reviving US Dollar demand. With investors looking past a Democratic candidate's victory in Alabama, which further reduced already narrow Republican camp's Senate majority, a goodish rebound in the US Treasury bond yields helped the greenback to recover early lost ground and has been one of the key factors weighing on the major.
The pair's downslide could also be attributed to some technical selling, especially after yesterday's close below 50-day SMA. Heading into today's key event risk - FOMC decision, repositioning trade also seems to have contributed towards some volatility over the past hour or so.
It, however, remains to be seen if the pair continues to find any fresh buying interest near the 1.1715 region or weakens below the mentioned support to confirm a bearish break as traders await fresh directional impetus from the upcoming US CPI print and the highly anticipated FOMC announcement.
Technical levels to watch
Weakness below the 1.1715 horizontal support is likely to accelerate the fall towards 1.1660-55 intermediate support before the pair eventually drops to its next major support near the 1.1600-1.1585 region.
On the flip side, any recovery attempt might continue to confront fresh supply near the 1.1760-70 region (50-day SMA), which if cleared could lift the pair towards the 1.1800 handle (100-day SMA)en-route 1.1835-40 resistance.
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