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EUR/USD: getting set up for a busy week ahead

FXStreet (Guatemala) - EUR/USD remains within the cluster of hourly 20 and 50 MA's with price well below the 200 SMA on the hourly time frame, indicating a pause in the heavy supply as price consolidates with a minor recovery taking place from the 23rd October lows of 1.0999.

The supply came post the ECB's dovish rhetoric last week, warning of headwinds from China and EM's that are slowing the domestic growth in the EZ that has come about due to the ECB's current monetary policy and QE. Draghi stated in his press conference in so many words that QE may be expanded/extended in respect of meeting the Central Banks 2% inflation target for the Eurozone.

Meanwhile, the euro has been able to drift higher as a soft start to the week in equities equates to some short covering and while investors get set for the Central Banks and various key data events taking place as we progress through the week. The FOMC is sighted to perhaps be less of a catalyst given the widely expected no change, but data such as EZ CPI, US PCE and durable goods orders are likely to be the main drivers in the price otherwise.

EUR/USD levels

Technically, the pivot at 1.1043 remains a source of gravity to the price as bulls struggle to pull away with the 55 SMA at 1.1059 offering an immediate target to overcome. S1 at 1.1016 ahead of S2 at 1.0975 and S3 at 1.0948 maybe tough to break as last defences for 1.0848 4th Aug low and the 30 year channel at 1.0560 and 1.0457.

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