- EUR/USD rebounds further during Friday’s US session and climbs to 1.1530.
- Technical bias still points to the downside but the bounce from lows eased pressures.
The EUR/USD rose further during the US session boosted by the GBP/USD pair that climbed following report, according to which UK PM Theresa May would drop a key demand regarding the Irish border.
The euro rose to 1.1533, rising slightly above Thursday’s high. From the 2-day high pulled back and near the end of the week was hovering around 1.1510/15, almost a hundred pips above the daily low but still down 40 pips from the level it had a week ago.
The main driver of the weekly slide of EUR/USD was a rally of the US dollar against majors on the back of higher US yields and then amid rising risk aversion. While the greenback continues to receive support from monetary policy expectations, the euro had been modestly affected by the Italian budget situation. The solid performance the EZ economic offers support to the common currency.
On Monday, Italy will respond to the EU letter regarding the budget target while on Thursday is the European Central Bank meeting. Market analysts don’t expect a significant impact from the ECB. Rates era expected to remains unchanged and focus will be on the statement and Draghi’s press conference. In the US, the key report is due next Friday, the first reading of Q3 GDP growth.
Levels to watch
If the recovery gains momentum, above 1.1530 the next strong resistance is seen around 1.1560 (horizontal level and the 20-day moving average) followed by 1.1600. During the week, the leg lower took place after EUR/USD was rejected from above 1.1600.
On the downside, a slide back under 1.1500 would expose the key support seen at 1.1460. A confirmation below would signal a test of October lows (1.1425/30) and below attention will likely turn to 1.1400.
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