EUR/USD tested key support near 1.1730, what’s next?
|The selling pressure behind the EUR/USD pair intensified in mid-Europe, knocking-off the rates towards the key support located near 1.1730 region.
EUR/USD: Politics continue to lead the way
The spot remained heavily sold-off into the political tensions surrounding the Catalan independence campaign, as investors digest the latest comments from the Spanish Deputy PM Santamaria, while fresh jitters hit the EUR markets on the back of the announcement that the Catalan Parliament is likely to meet Thursday morning to decide the response to direct rule from Madrid.
Meanwhile, the buying interest behind the US dollar remains unabated amid renewed optimism around the US economic and political environment, in light of last Friday’s approval of the 2018 budget bill, which is likely to pave the way for Trump’s tax reforms.
Also, rising expectations of a Dec Fed rate hike and three more rate increases next year, also keeps the upbeat tone behind greenback, as focus shifts towards the ECB policy decision due later this week for fresh hints on the bank’s tapering plans.
In the meantime, markets look forward to the Eurozone and US flash manufacturing PMI reports for near-tern trading opportunities.
EUR/USD Technical View
FX Strategists at UOB Group explained: “The sharp drop from last Friday’s 1.1858 high appears incomplete and further weakness seems likely for today. That said, last week’s low near 1.1730 is acting as a major support and this level is unlikely to yield so easily (next support is at 1.1700). Resistance is at 1.1790 but only a move back above 1.1820 would indicate the current weakness has stabilized”.
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