The EUR/USD pair extends its Asian rise in a bid to regain 1.20 handle, as the sentiment around the US dollar remains sour amid renewed North Korea threat.
EUR/USD: All eyes on PMIs, Draghi
The offered tone behind the US dollar is seen growing bigger, as we head towards the European opening bells, mainly driven tumbling Treasury yields amid reduced demand for risk assets. The latest warning from North Korea, citing that it may conduct a Hydrogen bomb test in the Pacific Ocean, dented investors’ appetite for higher-yielding assets.
Meanwhile, on EUR-side of the story, markets expect slightly weak readings of the Euro area manufacturing sector activity, however, the spot looks unperturbed and is headed northwards ahead of the speech by the ECB President Draghi due later this session.
Recall that the ECB Chief Draghi spoke little on the monetary policy yesterday in his speech at the second annual conference of the European Systemic Risk Board (ESRB), Frankfurt. Draghi Speech: Use of monpol is not the right instrument to address financial imbalances
Besides, Draghi’s speech, we also have a bevy of other ECB policymakers due to speaks in Europe, while a slew of Fedspeaks will be also eyed in the NA session. Forex Today: N. Korea news spooks Asia again, PMIs, Draghi, May - Key
EUR/USD Technical Set-up
Haresh Menghani, Analyst at FXStreet, writes: “Any subsequent up-move beyond the mentioned handle might continue to be capped at the top end of monthly trading range near the 1.2050-60 region. A decisive break out of the consolidative band should open room for resumption of the pair's prior appreciating move.”
“On the flip side, any retracement from higher levels might continue to find support near the 1.1900 handle. Failure to clear the 1.20 important barrier, and a subsequent drop below the mentioned support, could drag the pair towards an important horizontal support near the 1.1825-20 region,” Haresh adds.
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