The EUR/USD pair extended its sharp recovery move from nearly 21-month low touched during early Asian session and is now building on to its momentum above 1.0700 handle.
Currently trading at the highest level since Nov. 17, around 1.0720 region, the pair's price-action clearly seems to indicated that financial markets had mostly priced-in a 'NO' vote to Prime Minister Matteo Renzi’s constitutional reforms proposal in a referendum on Sunday. Spot accelerate the up-move after Euro-zone retail sales data surpassed expectations and showed a growth of 1.1% for October as compared to 0.9% growth expected and September's 0.4% contraction.
Moreover, possibilities of stop getting triggered, on a sustained move above 1.0600 handle, and a fresh bout of short-covering could have also contributed to the pair's sharp upsurge of over 200-pips from session low.
Focus now shifts to US economic docket featuring the release of ISM non-manufacturing PMI, which is expected to rise to 55.3 in November from 54.8 recorded in the previous month.
Technical levels to watch
From current levels, 1.0745 (Nov. 17 high) seems to act as immediate resistance above which the pair seems all set to aim towards reclaiming 1.0800 handle en-route its next major hurdle near 1.0850 region. On the flip side, 1.0680 level now becomes immediate support to defend, which if broken should now find strong support near 1.0600 round figure mark.
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