EUR/USD upside stalled (again) at 1.0950

Pablo Piovano FXStreet

EUR/USD has now returned to the 1.0930 area after the earlier bull run lost impetus in daily highs near 1.0950.

EUR/USD bolstered by USD-selling

Spot remains underpinned by the continuation of the offered bias around the greenback, although the earlier bullish attempt has once again run out of steam in the tough resistance area in the mid-1.0900s, coincident with the 2014-2016 resistance line and July’s troughs.

The pair met extra buying pressure after US Consumer Sentiment has disappointed expectations for the month of October. Previously, US advanced GDP figures for the third quarter have come in above forecasts, although USD remained apathetic in the wake of the release.

In the meantime, EUR/USD is closing its first week in the positive ground after three consecutive retracements. However, the extent of the leg higher in the pair remains to be seen, as dips in the buck remains shallow while the likeliness of a Fed’s move in December keeps lending support to the dollar.

Adding to USD resilience, yields in the US money markets keep the area of multi-month peaks, while CME Group’s FedWatch tool is signalling the probability of higher rates by end of 2016 at just above 71%.

EUR/USD levels to watch

The pair is now up 0.33% at 1.0933 facing the next resistance at 1.0951 (high Oct.28) followed by 1.1016 (7-month resistance line) and then 1.1041 (post-ECB spike Oct.20). On the other hand, a breakdown of 1.0820 (low Mar.10) would target 1.0709 (2016 low Jan.5) en route to 1.0538 (low Dec.3 2015).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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