The EUR/USD pair witnessed a bullish opening gap at the start of the ECB week and went to test 1.19 handle, before meeting fresh supply below the last to now consolidate the early volatile moves.
EUR/USD looks to regain 1.1900
The EUR bulls found some respite from the weekend’s North Korean bomb test news, prompting a bounce in EUR/USD from the ECB-induced lows of 1.1851. Markets resort to the low-yielding currency, EUR, in times of geopolitical tensions and market unrest.
Moreover, a renewed bout of selling seen in the US dollar against its main competitors, with the Asian traders reacting negatively to downbeat US jobs data, also added to the uptick in the spot. The USD index trades -0.20% lower around 92.60, unable to chew the offers near 922.80 region.
On Friday, the EUR/USD pair experienced a very volatile trading session, initially having rallied hard to 1.1980 levels on poor US labour market report. Soon after, the latest ECB headlines hit the wires and knocked-off the major almost 130-pips lower to test 1.1850 levels. Bloomberg reported that the ECB may not be ready to announce the changes to its QE program until Dec this year.
Stepping into a new week, all eyes remain on the ECB monetary policy announcement for the next direction on the Euro. In the meantime, markets look forward to the Eurozone Sentix Investor Confidence data due later today amid holiday-thinned markets.
EUR/USD Technical Set-up
Karen Jones, Analyst at Commerzbank, explained: “EUR/USD as we suspected the rebound from the uptrend failed to regain the 1.200 level and our attention has reverted to the trend line support at 1.1828. We suspect that the market may have topped near term, but this will only be confirmed on a close below the uptrend. The new high has also been accompanied by a divergence of the daily RSI. Below the 2 month uptrend lies the 4 month uptrend at 1.1709.”
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