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EUR/USD clinches gains above 1.1200, will it sustain?

FXStreet (Mumbai) - A renewed buying interest was witnessed in the EUR/USD pair, driving the major beyond 1.12 barrier as the European stocks reversed previous gains and turned negative.

EUR/USD breaks above hourly 50-SMA

The EUR/USD pair trades 0.26% higher at fresh session highs of 1.1219, heading towards 1.1250 round number. The major finally broke the range-trade and trades higher above the hourly 50-SMA as falling European stocks boost the bids for the euro as a funding currency. Among the major European indices, the pan-European benchmark, the Euro Stoxx 50 drops -0.37% while Germany’s DAX falls -0.56%.

Moreover, the shared currency remains pressured versus the US dollar after the poor German factory orders added to the recent series of dismal Euro zone PMI readings. Germany’s industrial orders fell 1.8% m/m in August, against expectations of a 0.5% increase.

Look towards the North American session, attention turns towards the ECB Draghi’s speech while the crucial US trade balance data will also hog the limelight. While the EUR calendar now remains data-deficient.

EUR/USD Technical Levels

The pair has an immediate resistance at the confluence of 50-DMA and 20-DMA now located around 1.1227-1.1236 region, above which gains could be extended to 1.1249 (Sept 28 High) levels. On the flip side, support is seen at 1.1173 (Today’s Low), below which the next support lies at 1.1149 (Oct 2 Low). A break below the last, EUR bears will take over drowning the pair to 1.1103 (Sept 23 Low) levels.

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