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EUR/USD off highs on ECB deposit rate cut talk

FXStreet (Mumbai) - The common currency was hit with fresh offers, pushing the EUR/USD pair to 1.0758 from the near 1.08 levels after reports hit wires that the ECB is considering a deposit rate cut in December.

Hovers around key Fib

The pair is now trading around 1.0758 (76.4% of Mar to Aug rally). The selling pressure was triggered by the Livesquawk report that the consensus is forming in the ECB governing council around a rate cut rather than an extension/expansion of the QE program.

The immediate focus is now on Fed’s Rosengren comments, who is likely to cheer Friday’s NFP reports and support December rate hike. Meanwhile, Wall Street’s reaction to the ever growing possibility of the Fed rate hike in December could also affect the demand for the funding currency EUR.

EUR/USD Technical Levels

The immediate resistance is located at the daily high of 1.0790-1.08, above which the spot could make a run at 1.0848 (Aug 5 low). A break above would expose 1.0897 (Nov 4 low). On the other side, a support is seen at 1.0705 (Friday’s low) and 1.0660 (Apr 21 low).

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