The EUR/USD pair is seen trying hard to sustain the recovery from Yellen’s hawkish testimony-driven sell-off to 1.0560 levels, and now makes headways towards 1.06 handle in early Europe.
EUR/USD forms a doji on daily sticks
Currently, the spot now peeks into the green zone at 1.0580, testing session highs posted previously at 1.0587, where the daily pivot resistance intersects. The main currency pair is on a steady recovery path amid a phase of upside consolidation phase in the greenback against its main competitors, as the USD bulls take a breather from yesterday’s extensive rally fuelled by Yellen’s comments that signaled Fed’s growing appetite for monetary policy tightening in the near-term.
However, the recovery may lack follow-through as a fresh round of USD buying is expected once the European traders hit their desks and react to yesterday’s testimony delivered by the Fed Chair Yellen before the Senate Banking Committee. While a slew of disappointing macro updates from the Eurozone and Germany released a day earlier continue to undermine the sentiment around the euro.
Later today, the spot remains at the mercy of the USD dynamics in wake of a fresh batch of US economic releases and Fedspeaks due on the cards in the NA session. In the meantime, the Eurozone trade balance data is likely to keep the EUR traders busy.
EUR/USD Technical Levels
In terms of technicals, the pair finds the immediate resistance 1.0602/08 (5 & 50-DMA). A break beyond the last, doors will open for a test of 1.0658 (10-DMA) and from there to 1.0676 (100-DMA). On the flip side, the immediate support is placed at 1.0561 (post-Yellen low) below which 1.0520 (Jan 6 low) and 1.0500 (psychological levels) could be tested.
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