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EUR/USD struggling to extend beyond 1.1300, EU stocks turn cautious

FXStreet (Mumbai) - A sudden EUR/USD rally lost steam just shy of NFP-highs on the 1.13 handle and retraced slightly amid a slight turnaround seen in the risk-sentiment as European stocks waver.

EUR/USD back below 1.1300

The EUR/USD pair trades 0.13% higher at 1.1253, unable to extend beyond 1.1262 levels. The EUR bulls took a breather after witnessing a 50-pips spike after European stocks opened on a weaker note, which further fuelled the risk-off sentiment.

However, the risk-aversion appears to have eased somewhat as the European stocks wiped-out losses and resumed the recent upstreak. Thus, the EUR/USD pair faded a spike to highs at 1.1309 levels and slipped below 1.13 handle.

On the data-space, we had not-so significant German trade data, which had limited impact on the major. The trade data revealed that the surplus shrank in Sept to EUR15.3 billion in Aug versus an expected surplus of EUR 19.0 billion. In July, EUR 25.0 billion surplus was generated.

Markets now eagerly await the ECB minutes to throw fresh light on the QE program after the ECB Chief Draghi noted last month that the central bank was ready to do more.

EUR/USD Technical Levels

On the upside, the major faces immediate resistance NFP highs at 1.1319 beyond which 1.1400 (round number), could act as a strong hurdle. A breach of the last could open doors for a test of 1.1442-60 (Sept 17 & 18 Highs). While the immediate support is located at 1.1251 (hourly 20 & 50-SMA confluence), below which 1.1219 (hourly 200-SMA) could act as a strong support. A failure to resist the last, the prices could drown to 1.12 (psychological levels).

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