- EUR/USD comes under pressure following two daily advances.
- The mid-1.1900s now emerge as quite a decent resistance.
- The pair managed to rebound from the oversold territory.
EUR/USD’s upside momentum seems to have met an initial resistance near the 1.1950 area so far this week, all following recent multi-week lows in the mid-1.1800s.
While investors’ sentiment looks poised to keep favouring the greenback in the very near term, EUR/USD needs to clear the 1.1950 area to allow for the continuation of the recovery and mitigate the selling pressure somewhat.
The renewed positive note in the German 10-year benchmark also seems to underpin the pair’s recovery vs. the steady stance from the US peers.
Still on the positive side for the single currency, better-than-expected advanced PMIs for the month of June lend extra support to the recovery in spot, although much of this improvement in the region’s fundamentals appear already priced in, favouring the shift to the dollar dynamics, namely the sooner-than-anticipated tapering talk, higher inflation, and the full re-opening of the economy.
The proximity of the oversold territory could still support some occasional bullish attempts, however, while a sustainable break above the 200-day SMA (1.1993) needed to regain the positive outlook.
That said, there is a minor hurdle at a Fibo retracements at 1.1976 ahead of the more significant barrier at the critical 200-day SMA, today at 1.1993. Further north comes in the psychological yardstick at 1.20 the figure. Above the 200-day SMA, the selling pressure is expected to alleviate somewhat.
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