EUR/USD gains capped around 1.2360

26 February, 2018

Spot regained buying interest and climbed to highs near 1.2360. USD started the week on a weak fashion, stays below 90.00. ECB’s M.Draghi in the limelight later in the session.

The shared currency is trading in a moderately strong bias at the beginning of the week and has lifted EUR/USD to the boundaries of the 1.2360 region, or fresh daily tops.

EUR/USD focused on Draghi

The pair is reverting Friday’s drop although it remains within the rangebound theme that has been prevailing in the last sessions, with clear support around 1.2260 and gains still struggling to overcome the mid-1.2300s on a sustainable fashion.

Spot is advancing amidst a weaker buck, positive sentiment surrounding the riskier assets and on the back of a decent retracement of yields in the US 10-year reference, trading in the 2.85%/2.86% so far today.

The recent pullback in EUR has found echo in the speculative community, where traders scaled back their net long positions to the lowest level since December 26 in the week ended on February 20, as per the latest CFTC report.

Later in the session, EUR should be under scrutiny in light of the speech by ECB President M.Draghi before the European Parliament. In the data space, EMU’s advanced inflation figures for the month of February will be the salient event in the region this week, due on Wednesday.

Across the pond, the semi-annual testimony by Chief J.Powell should grab all the attention around the greenback, expected tomorrow. Today, January’s New Home Sales, the Chicago Fed National Activity Index and speeches by St. Louis Fed J.Bullard (2019 voter, centrist) and FOMC member and voter R.Quarles are all due later in the NA session.

EUR/USD levels to watch

At the moment, the pair is gaining 0.32% at 1.2342 and a break above 1.2365 (21-day sma) would target 1.2371 (10-day sma) en route to 1.2537 (high Jan.25). On the other hand, the immediate support emerges at 1.2260 (low Feb.22) followed by 1.2206 (low Feb.9) and finally 1.2165 (low Jan.18).

Source   Presented by HYCM
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