The EURUSD pair opened for the week on positive note, held steady above 1.165 handle across Monday’s market hours ending the day with 0.33% increase in value on weak sentiment surrounding USD in broad market. The pair continued steady uptrend movement on Monday and hit a 27-day high of 1.1697 in Asian market hours before turning range bound amid lack of triggers that favors either side of the pair and this move can be viewed as consildation above 1.165 Handle. As of writing this article, the pair is trading at 1.1667 down 0.09% on the day. The retreat in pair could be viewed as profit booking activities to trim of gains as pair hit new 27-day high. That said, the pullback could end up recharging engines for a convincing move above 1.17 as the reports that Trump and Merkel support the EU-US trade talks will likely lift the European stocks.
USD Investors to Drive Today’s Momentum on Silent European Calendar
The major European index futures – DAX 30, CAC 40, and EUROSTOXX 50 are pointing to a positive open. What’s more, the relentless flattening of the treasury yield curve and the resulting fears of curve inversion – a recession indicator, could reinforce the dovish Fed expectations and add to the bullish tone around the EUR. However, if the equities respond negatively to the flattening treasury yield curve, then the USD may gain on the safe-haven appeal. Yesterday’s positive run by EURO could also be viewed as a result of momentum gained from better than expected German Macro data. While the data helped breach new 27-day high, it failed to provide strength to breach august high of 1.175 handle or even breach 1.170 handle for that matter.
US market lacked macro data updates yesterday, but today’s calendar schedule will see CB consumer confidence data release in US markets while EU side of market remains silent for the day. When looking at the pair from technical perspective, The Euro has fallen below 1.6767 resistance price point and could fall further to 1.16580, if the pair fails to hold above 1.1650 handle during today’s European session it could see further fall in exchange rate until it hits support at 1.1640-20 price levels. On the flip side, if the pair manages to hold steady above 1.1650 in European session, it could retest resistance at 1.1676 and 1.1697 handles as it aims to breach August high of 1.175 price levels. Expected support and resistance for the pair are at 1.1658, 1.1640, 1.1620 and 1.1676, 1.1697, 1.1736 respectively.