EUR/USD: Bullish above 1.0900 on ECB taper hints & softer USD

Dhwani Mehta FXStreet

The EUR/USD pair stalled its recent bullish momentum in the Asian session this Wednesday, and now enters a phase of consolidation, after the bulls ran into the key resistance of 1.0950 levels.

The spot is trying to defend the bids near 1.0935 region at the moment, moving slightly away from five-month tops reached at 1.0951 in the US last session.

The Euro extended its rebound versus the American dollar on Tuesday, after the US dollar took the back seat across the board amid risk-on trades and doubts whether the Trump administration will actually provide details on the tax reform plans on Wednesday.

The spot also remains underpinned amid easing French election-related anxiety, as a Macron win appears to be full priced-in by markets, with most opinion polls showing about 60% support for Macron against 39% for the anti-EU candidate Le Pen.

Also, expectations of some hawkish hints from the ECB, with markets widely anticipating the central bank to resort to taper talks, adds to the recent bullish tone seen behind the major.

Nothing of relevance for the major in the day ahead, and hence, the US tax reform plans announcement will hog the limelight later in the NA session.

EUR/USD Technical Levels

Technical resistances for the pair are aligned at 1.0950/51 (psychological levels/ 5-month tops), 1.0968/71 (classic R1/ Fib R2) and finally 1.1000 (key resistance). On the flip side, the spot finds next support at 1.0909/00 (daily pivot), a break below that level could open the door to 1.0866/67 (5-DMA/ classic S1) and 1.0775 (10-DMA).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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