EUR/USD sees early gains as the US Dollar takes a breather

The Euro is holding onto firmly bullish momentum heading into Thursday's European session with ECB info and US CPI data on the docket.
The Greenback is seeing challenges as trade war fears resurface, temporarily burying Italy budget contentions.

Joshua Gibson FXStreet

The EUR/USD major pair is clipping into 1.1570 ahead of the European market session for Thursday, as broader market sees a continued slide in the Greenback extending from the US session on Wednesday.

Thursday brings the European Central Bank's (ECB) Monetary Policy Meeting Accounts at 11:30 GMT, but Italy headlines are never far away after driving the EUR/USD for much of the early week. Trade war fears and rising US Treasury yields are seeing the USD take a beating in the broader markets, and as long as bulls manage to keep their wheels upright the long-side trend should continue through Thursday's action.

The Euro could be on pace to extend the early session's gains, as the US Dollar looks set to take another leg lower across the G10 FX space, but the US' CPI reading later today at 12:30 GMT (forecast 2.3%, previous 2.2%) will likely see an acceleration in volatility.

EUR/USD levels to watch

The Greenback rolling over to expose its soft underbelly is the main theme covering broader markets, and as FXStreet's own Valeria Bednarik noted: "European currencies were the ones more benefited from broad dollar's weakness, further boosted by renewed hopes about a Brexit deal. As for the common currency, the intraday advance is still short of confirming an interim bottom at the low set last week in the 1.1460 price zone. Nevertheless, the pair has a short-term positive tone, as it recovered above the 23.6% retracement of its latest daily decline, now an immediate short-term support at around 1.1520. In the 4 hours chart, the pair advanced above a now flat 20 SMA, and while technical indicators advance within positive levels, the price is still developing below the 100 and 200 SMA, with the shortest crossing below the largest and both above 1.1600, indicating that in the longer run, the risk remains skewed to the downside."

Support levels: 1.1460 1.1420 1.1475

Resistance levels: 1.1500 1.1530 1.1565

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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