EUR/USD turns negative near 1.1760, Draghi eyed

Dhwani Mehta FXStreet

Having peaked near 1.1780 levels in the Asian trades, the EUR/USD pair gradually extended lower, now flirting with daily lows struck at 1.1759 last minutes.

EUR/USD trades below 20-DMA at 1.1779

The latest leg down in the spot is mainly driven by resurgent USD demand against its main competitors, tracking the renewed strength seen in Treasury yields across the time horizon, as upbeat US fundamentals continue to back the case for a Dec Fed rate rise. Meanwhile, Trump’s commitment on the tax overhaul plan also adds to the buoyant tone seen around the buck.

Trump: Want tax reform "by Christmas"

From the short-term perspective, any upside in the EUR/USD pair is likely to be short-lived until the Catalan crisis gets resolved, provided Catalonia’s President Puigdemont clarifies whether he wants to declare independence or not until the deadline ending tomorrow.

Moreover, downbeat German ZEW surveys and unimpressive Eurozone final CPI figures also add to the weight on the Euro. German Oct ZEW economic sentiment improves slightly, but misses estimates

Markets now look forward to the ECB speaks due today, with President Draghi expected to speak on regulatory reforms, while speeches from ECB’s Praet and Coeure will also be closely heard ahead of the Fedspeaks and US housing data due later on Wednesday.

EUR/USD Technical View

Haresh Menghani, Analyst at FXStreet notes: “With short-term technical indicators holding in negative territory, the pair remains poised to head towards testing the 1.1700 mark. Weakness below the mentioned handle might continue to find strong support near the 1.1675-70 horizontal zone.”

“On the upside, any recovery attempts might now confront fresh supply near the 1.1800 handle. Even if the pair manages to clear this immediate barrier, any further up-move should now be capped at a short-term descending trend-line resistance, currently near the 1.1830 region, also coinciding with 38.2% Fibonacci retracement level of 1.2092-1.1669 recent slide,” Haresh adds.

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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