The EURUSD pair staged a splendid bull run on Wednesday reclaiming 1.15 handle and reaching as high as 1.1543 as trade war topics return to main focus of global investors. The dollar came under selling pressure amid comments from US Treasury Secretary Steven Mnuchin who said that China shouldn’t weaken its currency as long as the differences between the two countries remain unsolved, further adding that the renminbi should be part of any possible trade deal. Meanwhile impact from Italian budget concerns lost grip on common currency’s strength in broad market. While US T.Yields were muted yesterday 2-year bond yield jumped to 2.90% its highest since June 2008 however this did little to affect US Greenback’s momentum in broad market as macro data in US markets yesterday was highly disappointing.
Long Term Outlook Remains in Favor of USD As Per Technical Data
As of writing this article, the EURUSD pair is trading at 1.1555 up 0.29% on the day after hitting an intra-day high of 1.15721 earlier today which is also the highest in last 7 trading sessions. Positive brexit proceedings also helped EURO maintain upper hand as trading session transitioned into today’s Asian market hours. Ahead of European market hours, the pair has retreated from daily highs but found stability above 1.1550 handle indicating short term trend for the pair remains bullish. Trade war fears and rising US Treasury yields are seeing the USD take a beating in the broader markets, and as long as bulls manage to keep their wheels upright the long-side trend should continue through Thursday’s action. On release front, Thursday brings the European Central Bank’s (ECB) Monetary Policy Meeting Accounts at 11:30 GMT and Italian headlines could also remain in investors focus as it has remained major driving force of EURO’s momentum so far this week.
While EURO could maintain positive momentum across today’s market hours the US’ CPI reading scheduled to release later today at 12:30 GMT is expected to come out bullish and such an update could see USD gain strength and put an end to EURO’s up move. When looking from technical perspective, the pair has a short-term positive tone, as it recovered above the 23.6% retracement of its latest daily decline now an immediate short-term support at around 1.1520. In the 4 hours chart, the pair advanced above a now flat 20 SMA, and while technical indicators advance within positive levels, the price is still developing below the 100 and 200 SMA, with the shortest crossing below the largest and both above 1.1600, indicating that in the longer run, the risk remains skewed to the downside. Expected support and resistance for the pair are at 1.1530, 1.1500, 1.1460 and 1.1575,1.1595,1.1637 respectively.
This article was originally posted on FX Empire
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