EUR/USD gathers pace for a test of 1.1700 ahead of key risk events

The bears continue to guard the 1.1680 resistance, prompting the EUR/USD pair to enter a phase of consolidation in Asia, as investors remain in a wait-and-see mode ahead of the Eurozone dataflow and ECB President Draghi’s speech due today.  

EUR/USD regains 20-DMA at 1.1658

The spot found fresh bids just ahead of 20-DMA and rebounded to hit daily tops at 1.1676 levels, before meeting fresh supply to now consolidate the renewed uptick below the last.

The range-play seen in EUR/USD since the overnight trades is mainly in response to increased cautiousness ahead of the key risk events lined up in the day ahead, including the Eurozone flash GDP, industrial production, and German ZEW surveys, while speeches by the ECB Chief Draghi and Fed Chair Yellen will be also closely eyed for fresh direction.

Further upside in the major also remains capped, in the wake of higher Treasury yields amid persisting risk-on trades and comments from the US Treasury Secretary Mnuchin. US Treasury Secretary Mnuchin prefers corporate tax cut next year.

Meanwhile, the downside remains cushioned amid cautious tone seen around the US dollar against its main competitors, as the US tax reform uncertainty continue to weigh on the sentiment. The USD index trades modestly flat at 94.40 levels, unable to resist above 94.50 barrier.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet, noted: “The main resistance from the current level is 1.1690, where the pair found selling interest a couple of times at the beginning of the month, with a break above the level favoring a test of 1.1750. Beyond this last, the upward potential will look a bit a more sustainable, with scope then to test the 1.1800 figure. Below 1.1620, on the other hand, the pair will be at risk of challenging the 1.1553 low set on November 7th. Support levels: 1.1620 1.1690 1.1550. Resistance levels: 1.1690 1.1720 1.1750.”