EUR/USD rallies to 1-month tops, nearing 1.1500 handle amid notable USD supply
• The post-FOMC USD rebound meets with some aggressive selling on Thursday.
• Technical buying above 55-day SMA/1.1400 handles accelerates the up-move.
The USD remained heavily offered across the board, pushing the EUR/USD pair to over one-month tops and closer to the key 1.1500 psychological mark.
The not so dovish Fed monetary policy outlook for 2019, now foreseeing two rate hikes, led to a rise in short-term interest rates. This coupled with a fall in the long-dated yields revived fears of an inversion in the yield curve, seen as a reliable indicator of a recession down the road, and was seen affecting negatively on the US Dollar.
The pair regained positive traction for the fourth consecutive session on Thursday and continued scaling higher through the mid-European session. Meanwhile, the latest leg of a sudden pickup over the past few hours could further be attributed to some short-covering move, following a sustained move beyond the previous session's swing high.
With today's strong up-move, the pair finally seems to have confirmed a near-term bullish breakthrough the crucial 55-day SMA hurdle. Hence, a follow-through up-move, led by some fresh technical selling amid absent relevant market moving economic releases from the US, now looks a distinct possibility.
Technical levels to watch
On a sustained move beyond the 1.1500 handle, the pair is likely to head towards the 1.1525-30 supply zone and pause amid overbought conditions on hourly charts. On the flip side, the 1.1440-35 region now becomes immediate support to defend, which if broken might drag the pair back towards testing the 1.1400 handle.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
