EUR/USD: Draghi "misjudged", EUR retreats only briefly
EUR/USD Current price: 1.1329
The EUR/USD pair retreats from the yearly high posted early Europe at 1.1387, as investors wait for new words coming from central bankers, gathered in an ECB forum in Portugal. The common currency got a major boost on Tuesday, as in the same event, ECB's Draghi sounded confident enough on the local economic recovery for the market to rush to price in tapering. US officers who hit the wires late in the US afternoon, were not convincing enough to save the greenback, as despite reiterating that one more rate hike is still in the table for this year, lowering inflation and a flattening yield-curve deny it. The pair plunged to 1.1290 but quickly bounced above the 1.1300 level, on headlines saying that the ECB's considers that markets have "misjudged" Draghi's speech on stimulus.
Buying the dips, now that the pair broke its range higher, seems to be the name of the game today. Technically, the 4 hour chart shows that moving averages keep advancing below the current level, while technical indicators have begun to correct lower, but remain within extreme overbought territory. Given the strength of the bounce, the risk remains towards the upside, with scope to advance up to 1.1460 on a break above the mentioned daily high. Below 1.1290 on the other hand, the corrective movement will likely extend during the upcoming US session.
Support levels: 1.1290 1.1265 1.1220
Resistance levels: 1.1360 1.1390 1.1425
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
