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EUR/USD extending recovery on 1.11 handle, near 1.1040

FXStreet (Mumbai) - The EUR/USD pair is picking-up pace on its recovery mode and now heads towards the 200-DMA located near 1.1080 region, as greenback extends its correction in the early European dealings.

EUR/USD supported at 1.1000

The EUR/USD pair trades 0.15% higher at 1.1035, hovering close to fresh session highs of 1.1040 reached in last hours. The main currency pair attempts a minor recovery from a brief dip below 1.10 barrier seen on Friday and remains well bid on the back of broad based US dollar retreat after last week’s heavy gains.

The EUR/USD pair was heavily sold-off over 350 pips last week after the ECB hinted towards additional QE in Dec at its Thursday policy meeting. The ECB news triggered a fresh sell-off in the EUR and pushed the greenback higher across the board as the divergent monetary policy outlooks regained prominence.

In addition, Friday’s China rate cut news also boosted risk-on sentiment and further diminished the safe-haven bids for the euro, dragging EUR/USD to fresh two-month lows below 1.10 handle.

In the day ahead, the US dollar price action will dictate the moves in the EUR/USD pair while German Ifo survey as well sentiment on the European stocks will also having some bearing 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.

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