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EUR/USD: 1.1750 – a tough nut to crack, eyes on politics, US data

  • DXY tracks USTs lower on Yellen, US politics.
  • Remains capped by 1.1750.
  • US durable goods and Fed minutes eyed.

 

The EUR/USD pair extended its overnight side-trend into Asia, as the bulls consolidated yesterday’s reversal from 1.1713 levels amid a lack of fresh economic drivers and broad-based US dollar weakness.

EUR/USD remains below 5-DMA in Asia

The US dollar maintains its offered tone intact against its main competitors so far this session, allowing the EUR/USD to pair to extend its upside consolidative mode, as investors brace for the key US durable goods data for fresh trading impetus. The USD bulls remain on the back foot, following Yellen’s comments and the latest US Mueller-Kushner probe news, as reported by the WSJ.

Meanwhile, the spot continues to face stiff resistance near the midpoint of 1.17 handle, as the sentiment around the Euro remains driven by politics, especially after the weekend’s failed German coalition talks, with CDU’s Merkel now expected to form a minority government or go for re-elections.

In absence of fresh fundamental news from the Euroland, the monetary policy divergence between both continents will also remain in play, as attention gradually turns towards the US durable goods data and FOMC minutes due later in the NA session.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet, explained: “Shorter term, and according to the 4 hours chart, the price settled below a bearish 20 SMA, but held above a horizontal 200 SMA, as technical indicators maintain a neutral stance within the bearish territory, barely turning higher, but with limited directional strength. The pair needs to settle above 1.1745, the mentioned Fibonacci level, to be able to extend its recovery, while further slides should be expected below 1.1705, the next Fibonacci support. Support levels: 1.1705 1.1670 1.1630. Resistance levels: 1.1745 1.1790 1.1830.”

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