EUR/USD is currently down -0.20% at 1.1760 with a high of 1.1774 and a low of 1.1752 having opened at 1.1765, closed NY at 1.1778.
The dollar was strong on Friday against nearly all in the G10's, with US 10 years rising as much as 7bps to 2.38%, while the 2 year climbed 4bps to 1.57%. Yields in Europe also steepened, but to a lesser degree.
Why was the dollar bid?
"The market ran with the passage of the 2018 budget, anticipating tax reform getting through Senate. Passing a budget unlocks reconciliation, which enables the GOP to pass a tax bill with a simple 51- vote majority in the Senate, negating a possible Democratic filibuster. US Treasuries bear steepened, the dollar rallied, equities spiked and commodities were mixed," explained analysts at ANZ.
EUR/USD events this week?
Meanwhile, for the week ahead, all eyes are with the ECB, Euro area PMIs and the US Q3 GDP, the advance estimate. The ECB is widely expected to announce that the monthly pace of asset purchases will be reduced from the beginning of next year. "However, the bigger issue here is whether the ECB keeps the programme open-ended or sends a firm signal about ending it," explained analysts at Nomura.
EUR/USD levels
- Support levels: 1.1760 1.1720 1.1690
- Resistance levels: 1.1835 1.1865 1.1890
Valeria Bednarik, chief analtst at FXStreet explained that EUR/USD's the daily chart shows that, while the upward potential has receded, a downward movement is still not confirmed:
"The price hovers around a horizontal 20 DMA but above bullish 100 and 200 DMAs, this last well below the current level. Technical indicators have turned south, but the Momentum is still above its 100 level whilst the RSI is now at 46, both within neutral territory," Valeria explained.
Shorter term, and according to the 4 hours chart, Valeria argued that the scale leans towards the downside, as the early recovery from the 61.8% retracement of its latest bullish run met selling interest around a bearish 200 SMA, with the price currently below all of its moving averages, the Momentum indicator about to cross its 100 level, and the RSI indicator directionless around 44:
"The pair has an immediate support at 1.1760, where it bottomed on Friday, followed by 1.1720. Below this last, the downward potential will become more serious, with scope for a downward move towards 1.1660 a major static support area." Valeria added.
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