EUR/USD: Further upside still in play ahead of US ISM, Fed minutes?

The overnight recovery in the EUR/USD pair faltered in Asia, as sellers continued to lurk near 1.2065 region amid a pause in the USD sell-off across the board.

However, the latest leg lower in the main currency pair appears to have found some support near 1.2040 levels, with the USD index now consolidating its tepid recovery near 91.65 levels.

The sentiment around the major also remains underpinned by optimism about the euro zone’s economic outlook, especially after the solid German and Eurozone final manufacturing PMI readings, suggesting that the ECB could scale back its monetary stimulus programme sooner (than later).  

Moreover, the latest remarks from the ECB Governing Council member Coeure noting that he sees a “reasonable chance” the bank’s bond purchases would not be extended beyond September, further supports the recent upsurge seen in EUR/USD to four-month tops of 1.2081 levels.

Markets now look forward to the second-liner German unemployment change figures that will be reported ahead of the US ISM manufacturing PMI and the latest FOMC minutes for fresh trading impetus.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet noted: “The pair has a set a high for 2017 at 1.2092, while in January 2015, the high was set at 1.2101, making of the 1.2100 region a major static resistance area. A break above it will likely trigger stops, resulting in a steeper advance which will target the 1.2260 region for later this week, the next strong static resistance area. Support levels: 1.2020 1.1980 1.1950. Resistance levels: 1.2095 1.2130 1.2170.”