EUR/USD struggling for a firm direction, US data and Fed awaited

Haresh Menghani FXStreet

• Remains capped at 1.1660 support turned resistance.
• US macro data and Fed decision hold the key.

The EUR/USD pair extended its range-bound price action and remained capped below 1.1660 support turned resistance.

Against the backdrop of last week's dovish ECB tapering decision, Tuesday's softer-than-expected October flash EZ inflation print partly negated upbeat growth figures and did little to provide any immediate respite for the shared currency.

• Eurozone: Strong yet slightly diminishing economic momentum - Raboban

Adding to this, resurgent US Dollar demand, backed by a renewed pickup in the US Treasury bond yields and supported by Tuesday's strong second-tier US economic data, further collaborating towards capping the pair.

Despite the negative factors, the pair lacked any bearish pressure are traders seemed reluctant to place aggressive bets ahead of a busy second half of the week.

• EUR futures: rallies remain tepid

Today's US economic docket features the release of ADP report on private sector employment and the ISM manufacturing PMI print, which would be looked upon for some short-term trading opportunities ahead of the key FOMC decision.

This, along with the closely watched US monthly jobs report, popularly known as NFP and due for release on Friday, would also play an important role in determining the pair's next leg of directional move.

Technical levels to watch

Any weakness below 1.1625 level is likely to find support near the 1.1600 handle, which if broken now seems to pave way for extension of the pair's near-term downward trajectory towards 1.1550 intermediate support en-route the key 1.15 psychological mark.

On the upside, 1.1660 area, closely followed by the 1.1690 region (100-day SMA) are likely to act as an immediate hurdle, above which a bout of short-covering could lift the pair towards 1.1750 horizontal resistance ahead of 1.1780 level.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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