EUR/USD off 2017 highs, hovers near 1.1640

Dhwani Mehta FXStreet

The EUR/USD pair regained momentum in early trades and went to print fresh two-year highs of 1.1677. However, the bulls faced exhaustion at higher levels, knocking-off the rate sharply lower below the mid-point of 1.16 handle.

EUR/USD: Aug 2015 highs at 1.1715 still eyed

The spot is seen extending its retreat from fresh multi-month peaks, largely on the back of profit-taking, as markets resort to locking-in gains on their EUR longs after the recent rises, and ahead of the weekly closing.

Moreover, a fresh recovery-attempt made by the US dollar against its major rivals also collaborated to the latest leg down in EUR/USD. However, the downside appears capped amid the latest hawkish hint delivered by the ECB President yesterday and renewed weakness seen in Treasury yields.

On Thursday, the EUR/USD pair witnessed a sharp 180-pips rally after Draghi’s comments suggested that QE tapering soon on the cards, as early as this September/ October. Further, renewed US political jitters weighted heavily on the greenback, which offered extra legs to the ECB-led rally in the spot.

Meanwhile, the ECB Survey of Professional Forecasters had little impact on the prices, as the pair closely follows the USD price-action amid no economic releases slated for release today from both continents.

EUR/USD Technical Set-up

According to Valeria Bednarik, Chief Analyst at FXStreet, “From a technical point of view, the 4 hours chart shows that technical indicators have lost their upward strength, but also that they remain within overbought levels, whilst the price is far above all of its moving averages. The shortest one, the 20 SMA, is currently at 1.1565, providing a strong dynamic support. 2016 high comes at 1.1615, where the pair bottomed after the ECB's dust settled, now the immediate support ahead of the mentioned SMA. Beyond the mentioned daily high, the pair has room to extend its advance up to 1.1713, 2015 high.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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