EUR/USD flirting with lows, below mid-1.1600s

Haresh Menghani FXStreet

• Once again fails ahead of the 1.17 handle amid a goodish pickup in the USD demand.
• Holiday-thinned liquidity conditions might help the pair to hold above 1.16 mark.

The EUR/USD pair extended its sharp retracement slide from an intraday high level of 1.1682 and refreshed session lows in the last hour.

The pair's sudden reversal of around 50-pips since the early European session lacked any obvious fundamental trigger and could be solely attributed to some renewed USD buying interest.

In fact, the US Dollar Index reversed an early dip to over one-week lows and has now turned positive for the day, which eventually prompted some fresh selling around the major.

Meanwhile, today's mixed Euro-zone final services PMI prints did little to influence the sentiment surrounding the shared currency, with the USD price dynamics turning out to be an exclusive driver of the pair's momentum on Wednesday.

With the US markets closed in observance of Independence Day holiday, thin liquidity conditions might help limit further losses and lead to a rather lacklustre trading action during the second half of Wednesday's trading session.

Technical levels to watch

Immediate support is pegged near the 1.1620 level (overnight low) and is closely followed by the 1.1600 handle, below which the pair is likely to accelerate the slide back towards testing mid-1.1500s.

On the flip side, the 1.1680-85 region might continue to act as an immediate hurdle and any subsequent up-move beyond the 1.1700 handle seems more likely to remain capped by the 1.1715-20 supply zone.

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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