EUR/USD consolidating after yesterday’s sharp reversal from yearly tops

Haresh Menghani FXStreet

After yesterday's sharp reversal move, the EUR/USD pair has now moved into a consolidation phase and was seen oscillating within 20-pips narrow trading range.

With investors moving beyond the initial positive reaction to Emmanuel Macron’s victory in the closely watched French Presidential election on Sunday, the pair on Monday was being weighed down by increasing odds for an eventual Fed rate-hike action. Rising US treasury bond yields further reinforced market expectations and has kept a lid on any of the pair's attempted recovery move.

• The Macron trade was short-lived - ANZ

The pair, however, seems to have found some support just ahead of the 1.0900 handle amid subdued greenback price-action, with the key US Dollar Index holding stable around the 99.00 handle.

On the economic data front, the release of industrial production and trade balance figures from Germany are due during European session, while from the US the release of JOLTS job openings might provide some opportunities for short-term traders.

• Key US data preview: JOLTS to show a long-term slowdown in job openings growth? - Nomura

Apart from the second-tier economic releases, speeches by couple of FOMC members - Boston Fed President Eric Rosengren and Dallas Fed President Robert Steven Kaplan, might influence investors' expectations over the central bank's near-term monetary policy outlook and would also be looked upon for some impetus.

Technical levels to watch

Bears would be eyeing for a follow through weakness below 1.0915 immediate support, which if broken should extend the pair’s corrective slide towards 1.0885 intermediate support en-route mid-1.0800s.

On the upside, 1.0945-50 area now seems to act as immediate hurdle, above which the pair is likely to make a fresh attempt towards reclaiming the key 1.1000 psychological mark hurdle and head back towards multi-month tops resistance near 1.1020-25 region.

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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