EUR/USD headed back to 1.2000 ahead of EZ data, ECB minutes?

Having stalled its corrective slide near 1.1940 levels in the overnight trades, the EUR/USD pair attempted to recover some ground, but sellers continued to lurk near 1.1965 region.

EUR/USD: 1.2000 back in sight?

The spot is seen trying hard to take on the recovery above 1.1965/70 region in a bid to reclaim the 1.20 handle. However, a positive tone seen around the US Treasury yields continue to cap the upside.  

Despite the overnight retreat, the pair continues to find support from a broadly subdued US dollar and negative sentiment in the Asian equities, which usually boosts the demand for the funding currency EUR.

The main currency pair eroded nearly 60-pips from two-day tops of 1.2018 levels in the US last session, after mixed Fedspeaks once again raised concerns over the Fed rate hike prospects for this year.

Fed’s Kaplan noted that he sees three rate hikes in 2018 while Fed’s Evans said that he want wanted to postpone rate hikes until mid-2018 in order to see signs of stronger inflation.

Earlier on Tuesday, the major broke through the 1.20 handle and entered the bullish territory after the US dollar was broadly sold-off into the Chinese officials. The Chinese officials noted that they are considering to slow or halt the purchases of the US Treasuries, viewing them as less attractive to other assets.

Valeria Bednarik, Chief Analyst at FXStreet, writes: “This Thursday, things will start to get a bit more interesting, with the EU releasing November industrial production data and the US publishing December PPI.”

Also, of note remains the ECB monetary policy meeting account due later today for fresh insights on the bank’s taper plans this year.

EUR/USD Technical Levels

Bednarik adds: “The bullish momentum faded and the pair is again at risk of falling, as in the 4 hours chart, it briefly traded above a bearish 20 SMA, now back below it, while technical indicators corrected extreme oversold conditions, but failed to regain bullish territory, now heading back south below their mid-lines. The pair is barely up daily basis, and at this point, would need to break below 1.1910, the next Fibonacci support, to confirm another leg lower ahead. Support levels: 1.1910 1.1875 1.1830. Resistance levels: 1.1960 1.2000 1.2030.”