Fresh US dollar selling offers fresh life to the EUR bulls, 1.1650 back on sight. Technical set up favors further EUR short-squeeze, as focus shifts to US jobs data.
The EUR/USD pair found fresh bids near 1.1615 region in the European session, prompting the bulls to attempt another run towards the midpoint of the 1.16 handle.
The latest upmove in the spot is mainly driven by a fresh bout of selling seen in the US dollar across the board, as markets remain on the defensive heading into the looming US $200 billion tariff deadline on the Chinese imports.
The common currency also derives support from falling Italian-German yield spread while the renewed uptick in the pound also appears to be dragging the EUR along. Recall that Cable rallied in the overnight trades after headlines hit the wires, citing that Germany and the UK are said to drop key Brexit demands and ease the path to a Brexit deal.
In the day ahead, markets look forward to the US ADP jobs and ISM services PMI data for near-term trading opportunities. Also, of note remains the Fedspeaks due later in the NA session.
EUR/USD Technical Levels
According to Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers, “thin daily cloud (1.1662/1.1678) also attracts fresh bulls for a break higher and attack at falling 100SMA (1.1710) and 28 Aug high (1.1733). Meanwhile, corrective easing may precede, as 14-d momentum turned south and created bear-cross with its 7SMA.
Initial support lays at 1.1615 (session low/55SMA), followed by 1.1600 (hourly Kijun-sen/55SMA), where dips should find support to keep fresh bulls intact. Loss of 1.1600 handle would delay bulls and risk retest of 1.1568 pivot (30SMA/Fibo 38.2% of 1.1300/1.1733 ascend).”