EUR/USD aiming back towards 1.1100 handle

Haresh Menghani FXStreet

The EUR/USD pair maintained its offered bias through European session and is now headed back toward the lower end of daily trading range, in the vicinity of the 1.1100 handle.

Spot snapped four consecutive days of winning streak and retreated after hitting fresh multi-month highs in the region of 1.1170-75. The pair's retracement could be attributed to some profit taking, led by a modest US Dollar recovery and following its recent up-surge of over 300-pips over the past 4-trading sessions.

The corrective slide seems to have picked-up pace in the past hour or so after ECB minutes revealed possibilities of a cut in the central bank's inflation projection at its next meeting in June. The minutes also showed that the governing council broadly agreed to maintain guidance in wake of broadly balanced economic risks.

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Next on tap would be the US economic docket, which would be looked upon for some trading impetus ahead of the scheduled speech by the ECB President Mario Draghi, later during the day. Meanwhile, the latest bout of political turmoil in the US should continue to grab attention and might continue influence the pair's movement in the near-future.

• US: Philadelphia Fed and jobless claims in focus - TDS

Technical levels to watch

A follow through retracement below the 1.1100 handle could get extended towards 1.1075 horizontal support, below which the pair is likely to aim towards testing 1.1025-20 strong support. On the flip side, 1.1155-60 area now becomes immediate resistance, which if cleared decisively should lift the pair towards reclaiming the 1.1200 handle before eventually boosting it further towards its next major hurdle near 1.1250 area.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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