- EUR/USD moves higher, although still trades below 1.20.
- The 200-day SMA around 1.1995 emerges as the next hurdle.
- Markets’ focus will be on key releases in the US calendar.
EUR/USD extends the side-lined theme so far this week, always above the key 1.1900 yardstick albeit capped by the 1.1970/80 band for the time being.
Same performance is seen in the greenback. Although flat yields of the US 10-year reference somewhat justify the consolidative mood in the buck, the recent upside in yields of the German Bund comes in contrast with the lack of direction in spot. Furthermore, it seems EUR/USD pays more attention to the US-German yields spread in the shorter end of the curve, particularly following the FOMC event.
Further consolidation in EUR/USD looks likely, as market participants seem to have fully adjusted to the recent message by the Federal Reserve and have already priced in the strong economic bounce on both sides of the Atlantic. That, coupled with the usual summer lull should leave the pair somehow unmotivated until speculations around the next Jackson Hole Symposium start to kick in.
On the technical sphere, EUR/USD still navigates in levels close to the oversold territory. Occasional bullish attempts should meet initial resistance at the Fibo level near 1.1980 ahead of the more significant barrier at the critical 200-day SMA, today at 1.1994. Further north comes in the psychological yardstick at 1.20 the figure. Above the 200-day SMA, the selling pressure is expected to mitigate.
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