Having peaked at fresh fourteen month tops of 1.1538, the EUR/USD pair has entered a phase of minor-consolidation, as the bulls take a breather before the next leg higher.
EUR/USD awaits ZEW
The bulls paused the latest run higher over the last hours, sending the EUR/USD pair slightly lower towards 1.1520 levels, as the USD sell-off appears to have stalled for the time-being, with investors awaiting fresh cues from the sentiment on the European open.
The USD index, which measures the greenback’s value against a basket of six major currencies, got hammered to fresh ten-month lows of 94.51 after Trump’s Healthcare bill faced rejection by the US Senate once again. The Trumpcare debacle re-ignited concerns over Trump’s presidency and his ability to deliver on the campaign promises.
In the day ahead, risks remains to the upside in EUR/USD, as a fresh round of USD selling is expected, once the European traders hit their desks and react negatively to the Healthcare news. However, it remains to be seen if the spot sustains the upside, as markets believe the rally is overdone and hence, any correction lower would not come as a surprise.
On the data front, we have the ZEW surveys, with the German ZEW release to have a major impact on the Euro, while the US import prices will fill in an otherwise light US docket.
EUR/USD Technical Levels
According to Karen Jones, Analyst at Commerzbank, “EUR/USD is attempting to break higher: The new high has not yet been confirmed by the daily RSI and we have another 13 count, we will see where it closes today before we decide whether to go with this break higher. Nearby support is provided by the short term uptrend at 1.1340 and the high from mid June at 1.1296, while above here it is bid and there is scope for 1.1616, the May 2016 high and then 1.1713/36 the August 2015 high and long term Fibo.”
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