FXStreet (Mumbai) – The shared currency is seen defending mild gains versus its American counterpart in the mid-European session, with EUR/USD keeping range around the hourly 20-SMA.
EUR/USD trades above 5-DMA
The EUR/USD pair trades 0.07% higher at 1.1026, failing to hold at higher levels near the mid-point of 1.10 barrier. The main currency pair spiked to as high as 1.1057 levels after the European stocks opened in the negative territory, although faded the spike and now mires near session lows after the mixed German IFO surveys dampened the sentiment around the EUR.
The headline Ifo Business Climate Index fell to 108.2 during Oct, below the 108.5 booked in September, although beat forecasts of 108.10 drop. Meanwhile the Current Assessment sub-survey, dropped to 112.6 points, after the previous month’s figure of 114 and missing estimates of 113.5 points.
However, the bulls keep the corrective rally intact as the US dollar remains broadly undermined with markets repositioning ahead of the crucial Fed event on Wednesday. While a minor sell-off in the European stocks on the back of profit-taking also keeps the EUR underpinned.
Last week, the major lost over 350 pips after the ECB signalled further easing in Dec on Thursday and the Chinese central banks slashed key interest rates on Friday, thus reviving markets’ belief in the world’s reserve currency – the US dollar.
In the day ahead, the US dollar price action will dictate the moves in the EUR/USD pair while the US new home sales data as well sentiment on the Wall Street will also have some influence on the major.
EUR/USD Technical Levels
The pair regains above 1.10 barrier with the next the immediate resistance at 1.1079 (200-DMA, beyond which 1.1100/04 (round number + 5-DMA) would be tested and from there to 1.1155 (100-DMA). While the immediate support in sight is located at 1.1002/1.1000 (Today’s Low + psychological levels), below which 1.0984/59 (daily S3 + Aug 11 Low) could be tested, a breach of the last would expose 1.0850 (August lows) levels.
(Market News Provided by FXstreet)