EUR/USD finds buyers near 1.1640? US tax debate in focus
- USD rebound stalls.
- ECB’s Constancio’s comments cap the bounce.
- CB-speaks, US tax reform debate and US inflation in focus.
Fresh bids emerged near below 5-DMA at 1.1642, prompting a fresh bounce in the EUR/USD pair over the last hour, in a bid to take-out stiff resistances located near 1.1660 levels.
EUR/USD: Buy the dips?
The pick-up in buying interest seen around the US dollar against its main peers appears to have waned amid tumbling Treasury yields, bringing a halt to the latest leg lower in EUR/USD. The USD index sticks to recovery gains at 94.49 levels, having stalled its upmove at 94.54, while 10-year Treasury yields move back below 2.40% - the key level.
Meanwhile, ongoing rally in EUR/GBP on the back of further selling in GBP across the board also aids the recovery in EUR/USD pair. However, it remains to be seen if the spot can sustain the renewed uptick amid the latest comments from the ECB Vice-President Constancio, noting that an “ample degree of monetary stimulus is still needed”.
Markets ignored downbeat German WPI data, as all eyes remain on the USD price-action and US tax reform developments for fresh trading impetus.
EUR/USD Technical Levels
Slobodan Drvenica at Windsor Brokers Ltd., noted: “Dip-buying is seen as favored scenario with broken daily Tenkan-sen (1.1622) expected to contain extended dips. Rising hourly cloud (spanned between 1.1633 and 1.1617) also underpins near-term action. Friday’s close above 1.1661 (Fibo 38.2% of 1.1836/1.1553 down leg) and bullish weekly close were positive signals for extended recovery. Fresh upside action requires a sustained break above falling 20SMA (1.1684) to generate a bullish signal for 1.1700+ recovery.”