EUR/USD: Upside seems limited ahead of EZ Q3 GDP, Draghi’s speech
|- DXY sits at 2-week tops.
- Risk-on to weigh?
- Eyes on EZ Q3 GDP, US jobless claims and Draghi’s speech.
The EUR/USD pair traded in a 15-pips tight range around 1.18 handle in the Asian trades, consolidating the overnight recovery from 2-week troughs of 1.1781.
EUR/USD: 50-DMA support of 1.1758 still in sight
The main currency pair’s tepid recovery lost legs at the support-turned-resistance located at 100-DMA at 1.1809 levels, leaving the rates modestly flat so far this session, as the bulls await fresh impetus to extend the recovery mode.
The stalled upside in EUR/USD can be mainly attributed to the risk-on rally seen in the Asian equities, which usually weighs down on the demand for the funding currency Euro. Moreover, with the US dollar sitting at two-week tops across its main competitors amid higher Treasury yields, the spot is likely to keep the recovery gains in check. The USD index trades at 93.55, hovering near the 2-week tops of 93.62.
On Wednesday, the major slumped to the lowest levels since Nov. 22 after the US dollar extended the rally across the board on the US tax news optimism and inline ADP report. More so, widening 10-year US-German yield spread also supported the greenback, adding to the downside in the prices.
Looking ahead, the pair will await the releases of the German industrial figures and Eurozone Q3 GDP revision ahead of the US jobless claims and ECB Draghi’s speech due later in the NA session. ECB Chief Draghi is due to hold a press conference presented by the Bank for International Settlements, hosted at the ECB, in Frankfurt.
EUR/USD Technical Levels
Valeria Bednarik, Chief Analyst at FXStreet, noted: “Shorter term, and according to the 4 hours chart, the risk also leans towards the downside, as the price has fallen further below it's 20 and 100 SMAs, with the shortest gaining downward traction above the largest, as technical indicators continue nearing oversold territory. The 1.1820/30 region is now the immediate resistance ahead of the 1.1870 price zone, where selling interest capped the upside ever since the week started. Support levels: 1.1760 1.1725 1.1685. Resistance levels: 1.1825 1.1870 1.1910.”
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