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EUR/USD attempts to develop upside correction

FXStreet (Moscow)- EUR/USD goes ahead with its upside correction; the pair reached the fresh high at 1.2868 before retreating towards 1.2863 during early Asian hours on Monday.

Dead cat’s bounce?

EUR/USD lived through the tenth bearish week in a row. The pair has lost impressing 740 pips since the middle of July on the back of diverging monetary policies from the FED and the ECB. While EUR/USD has started the week with mild recovery as it has taken off from new low of 2014 at 1.2830, the upside is weak and unconvincing. The single currency is deeply oversold, which leaves the door open for a mild bullish correction with possible sideways trading. Though, EUR bears have nothing to worry about as long as the pair trades below 1.2900/30 area. From the fundamental point of view, Draghi’s speech is seen as the main risk event of the day. Investors believe that the ECB is running out of options to bring to life Eurozone’s economy as first TLTRO is deemed as a failure. His comments might shed some light on whether he is going to move on to a large-scale quantitative easing. If more aggressive easing is on cards, EUR/USD is likely to resume the downside with the initial aim at 1.2830 followed by 1.2800.

What are today’s key EUR/USD levels?

Today's central pivot point can be found at 1.2862, with support below at 1.2795, 1.2760, and 1.2693, with resistance above at 1.2897, 1.2964 and 1.2999. Hourly Moving Averages are bearish, with the 200SMA bearish at 1.2921 and the daily 20EMA bearish at 1.3015. Hourly RSI is bearish at 47.

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