EUR/USD: Struggle with 1.0900 extends, ECB Draghi eyed

EUR/USD’s overnight recovery ran into strong resistances lined up just shy of 1.09 handle post-Tokyo-open, since then the rate remains almost flat-lined in a 10-pip slim range.

EUR/USD looks vulnerable ahead of ECB Draghi’s speech

Heading into the early European trading, the spot maintains the bid tone and awaits fresh impetus for next direction, in the wake of a minor-correction seen in the US dollar against its major rivals.

However, the greenback may regain footing and resume its recent bullish run against the shared currency, mainly driven by divergent monetary policy outlook between the Fed and ECB, despite, yesterday’s comments by the German finance minister Schaeuble, which cited that the ECB should begin normalization soon.

Meanwhile, the Fed remains on track to hike rates in June amid upbeat US fundamentals and receding global political uncertainty. A slew of Fedspeaks delivered a day before also backed the case for a June rate hike as well as balance sheet size reduction.

Looking ahead, all eyes remain on the ECB President Draghi’s speech amid a data-light EUR calendar, while in the US too, we have limited macro releases including the import prices and Federal Budget balance. Meanwhile, Fedspeaks will draw some attention.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet explained, “Technical readings in the 4 hours chart also favor a new leg lower, as technical indicators maintain their strong bearish slopes near oversold territory, as the 20 SMA turns south well above the current level. Support levels: 1.0850 1.0820 1.0770 Resistance levels: 1.0895 1.0930 1.0965.”