EUR/USD struggles to pull away from daily lows, holds above 1.18

The EUR/USD pair, which eased to a daily low at 1.1830 in the early NA session, is having a difficult time staging a meaningful recovery. As of writing, the pair was trading at 1.1838, losing 0.18% on the day. 

On Tuesday and Wednesday, the pair gained traction and rose more than 100 pips amid a broad-based selling pressure witnessed on the greenback. After the FOMC released the minutes of its September meeting yesterday, the pair rose to a fresh 2-week high at 1.1880 as the probability of a rate hike in December weakened. However, it didn't take long for the DXY to reverse course and erase the majority of its losses as the negative impact of the minutes on the buck faded away. 

Moreover, today's upbeat data provided an additional boost to the USD, lifting the US Dollar Index to a fresh daily top at 93.06 and weighing on the pair. According to the data released by US Department of Labor, in the week ending October 7, the advance figure for seasonally adjusted initial claims dropped to 243,000 from 258,000. More importantly, as signaled by the PMI data earlier this month, the Producer Price Index grew by 2.6% on a yearly basis, recording its highest level since February 2012.

On the other hand, the shared currency struggled to find demand throughout the day after the ECB's Chief Economist Peter Praet said " may be better able to evaluate the stimulus that can be expected to come from a purchase plan that is to be executed over a more extended time interval," in a speech in New York, suggesting that the ECB may refrain from an aggressive QE tapering.

A couple of FOMC members and the ECB President Mario Draghi delivered their remarks at a panel on monetary policy titled "Rethinking Macroeconomic Policy," in Washington D.C., but the market reaction was non-existent as they didn't get into specifics about the policy outlook. 

Technical levels to consider:

With today's retreat, the RSI indicator on the daily graph eased to the 50 mark, suggesting that the pair is likely to remain in a neutral phase in the short-term. The initial support for the pair could be seen at 1.1810 (20-DMA) ahead of 1.1700 (100-DMA/psychological level) and 1.1665 (Oct. 6 low). On the upside, resistances align at 1.1880 (daily high), 1.1940 (Sep. 25 high) and 1.2000 (psychological level). 

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