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EUR/USD: An expensive bid ahead of Q4 risk event

FXStreet (Barcelona) - EUR/USD is trading at 1.2659, up 0.04% on the day, having posted a daily high at 1.2662 and low at 1.2651.

EUR/USD has pitched its tent on the bid throughout markets overnight around a mandible greenback giving back gains on profit taking across the board. However, this is far from a correction and long positions are likely to be fragile on any supply and real money flows entering as we approach this week’s showdown in the FOMC minutes. The minutes this week are the opening of Q4 following a highly strong set of US jobs data. There are expectations for a shift towards a more hawkish language from the Fed and this may be the very catalyst for fresh offers and lower lows.

EUR/USD technical risk staking up to the downside

Valeria Bednarik, chief analyst at FXStreet explained that the 4 hours chart shows current candle extending above a mild bearish 20 SMA, and she noted how the indicators are approaching their midlines, having erased all of their overbought conditions. “If the rally however does not sustain above 1.2600 during Asian hours, risk will turn back to the downside, eyeing a retest of critical 1.2500 level”.

USD/JPY noteworthy levels

Spot is presently trading at 1.2659, and next resistance can be seen at 1.2666 (Hourly 200 SMA), 1.2675, 1.2685 and 1.2740 (Daily Classic R2). Support below can be found at 1.2655 (Weekly Classic R1), 1.2629 (Daily Classic R1) ahead of psychological 1.2600, then 1.2550, 1.2520 and 1.2500.

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