EUR/USD stuck in tight range around 1.0875, IFO, ECB Draghi eyed

Dhwani Mehta FXStreet

The EUR/USD bearish consolidation phase extends into Asia this Tuesday, as the bears gather pace for the next leg lower amid renewed demand for the US dollar across the board.

EUR/USD capped below 5-DMA at 1.0891

Currently, EUR/USD trades modestly flat near session highs of 1.0880, having found support well above daily S1 located at 1.0859. The main currency pair failed to sustain above 1.09 handle and since then continues to trade around a flat-line below the last, extending its overnight range-play into Asia.

The major remains vulnerable amid fresh buying interest seen in the US dollar against its major peers, after recent hawkish Fedspeaks almost confirm a Dec rate rise, with higher 2-year treasury yields reflecting the same. Meanwhile, the USD index trades +0.12% higher at 98.76 levels, having retested multi-month tops reached yesterday at 98.82.

Calendar-wise, the major now await the German Ifo surveys ahead of the US consumer confidence and Richmond manufacturing data due later in the NA session. While the main risk event for the major today remains the ECB Chief Draghi’s speech, as he is likely to speak about stability, equity, and monetary policy at the German Institute for Economic Research, in Berlin

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0891 (5-DMA). A break beyond the last, doors will open for a test of 1.0934 (10-DMA) and from there to 1.1000 (key resistance). On the flip side, the immediate support is placed at 1.0850 (psychological levels) below which 1.0820 (March lows) and 1.0800 (round figure) could be tested.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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