The EUR/USD pair trades uneventfully around 1.0720, quietly consolidating, despite renewed dollar's demand, clearer across the board. Investors remain side-lined in the pair ahead of the ECB economic policy meeting to take place this Thursday. German Industrial Production rose by 0.3% in October worse than the 0.8% expected by better than previous -1.6%, monthly basis, while year-on-year, it held at 1.2%. Nevertheless, stocks in Europe are sharply higher, with the DAX at fresh yearly highs. The macroeconomic calendar will remain quite light in the US today, with only some minor releases in the docket, which means that stocks will likely continue leading the way, ahead of the Central Bank meeting.
From a technical point of view, the 4 hours chart shows that the downside potential remains limited, as the 20 SMA has advanced up to the 23.6% retracement of the latest daily slump, both converging at 1.0690, the immediate support, whilst the Momentum indicator maintains a strong upward slope within overbought territory, and the RSI hovers around 57, with a modest upward scope.
The immediate resistance is 1.0740, with an upward acceleration above it favoring a retest of the weekly highs, around 1.0795. Above it, the 38.2% retracement of the same decline stands at 1.0805, the level to surpass to present a more constructive outlook.
Below the mentioned 1.0690 on the other hand, the pair may resume its slide, and move down to the 1.0640/50 price zone.
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