EUR/USD: steady ahead of a key support at 1.1161

Ross J Burland FXStreet

Currently, EUR/USD is trading at 1.1184, up 0.01% on the day, having posted a daily high at 1.1187 and low at 1.1180.

EUR/USD has been consolidating the downside with a resurgence of the dollar. The question is how much further can the dollar rise in an environment that is supportive of a higher euro over the medium term. The answer lies in how long the markets will continue to respond to hawkish Fed speakers and political promises around fiscal spending to spur on the recovery in the US.

EUR/USD is otherwise supported on improvements in the EU's economy, a more stable political outlook and the possibility of the ECB tapering in time to come with a turn in rhetoric from the Central Bank. However, the euro has slipped from the 1.12 handle while Wall Street, for now, is able to relish in the prospects found from Trump's budget plan for the fiscal year 2018. Also, Philadelphia Fed's President Patrick Harker was on the wires, via Reuters, repeating that he sees two more rate hikes this year. US Treasury Secretary Steve Mnuchin was saying today that he is hopeful that the tax reform will be completed in 2017.

EUR/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the price has found some support around a bullish 20 SMA. "Technical indicators turned sharply lower from overbought levels, currently pressuring their mid-lines and ready to break lower. The pair has an immediate support at Monday's low of 1.1161, while a stronger one comes at 1.1080. Approaches to this last will likely attract buying interest. Back above 1.1220, the risk turns towards the upside, with room then to extend the advance up to 1.1300."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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