EUR/USD fades US CPI-led bullish spike, back below 1.1900 handle
• USD extends profit-taking slide on softer CPI and lifts the pair to multi-day tops.
• The up-move quickly runs out of steam near mid-1.1900s amid a modest USD rebound.
• A strong follow-through buying needed to increase prospects for any further recovery.
The EUR/USD pair trimmed some of its post-US CPI strong gains and quickly retreated over 50-pips from multi-day tops.
The US Dollar profit-taking slide accelerated following the release of softer-than-expected US consumer inflation figures on Thursday and assisted the pair to build on its recovery from 4-1/2 month lows, touched in the previous session.
The pair surged past the 1.1900 handle, taking along some short-term trading stops, and jumped to an intraday high level of 1.1947, albeit lacked any strong follow-through traction.
Meanwhile, the price-action now seems to suggest that today's up-move, for the first time in the previous five sessions, was solely led by some short-covering amid a modest USD retracement.
Against the backdrop of a dovish ECB outlook, it would be interesting to see if the pair is able to build on its gains or the up-move is seen as an opportunity to initiate fresh short-positions.
Technical levels to watch
Any subsequent retracement back below the 1.1900 handle is likely to find support near the 1.1870 horizontal zone, which if broken might turn the pair vulnerable to resume with its prior depreciating trend.
On the upside, mid-1.1900s now seems to act as an immediate hurdle, above which the recovery move could further get extended and assist the pair to aim towards reclaiming the key 1.20 psychological mark.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
