EUR/USD sees a sudden turnaround, drops back closer to 1.1400 handle
• The post-FOMC USD selling pressure now seems to have abated.
• The ongoing rout in equities underpins USD’s safe-haven demand.
• Traders now eye US macroeconomic data for some fresh impetus.
The EUR/USD pair continued with its struggle to make it through 100-day SMA barrier and quickly reversed over 60-pips from an intraday high level of 1.1474.
The pair failed to capitalize on its early uptick back closer to one-month tops, set yesterday, and the latest leg of a sudden fall could be solely attributed a modest pickup in the US Dollar demand.
The post-FOMC USD selloff to one-month lows now seemed to show some signs of bearish exhaustion and turned out to be one of the key factors prompting some fresh selling at higher levels.
Meanwhile, the ongoing rout across equity markets, amid growing concerns over the health of the global economy, seemed underpinning the greenback's relative safe-haven status since the early European session.
Adding to this, relatively thin trading conditions, ahead of the year-end holiday season, might have further collaborated towards aggravating the downfall in absence of any obvious fundamental catalyst.
Hence, it would be prudent to wait for a strong follow-through selling before confirming that the pair’s recent corrective bounce from over 17-month lows might have already ended.
Moving ahead, today’s US economic docket, highlighting the release of final Q3 GDP growth figures and durable goods orders, will now be looked upon for some impetus on the last day of the week.
Technical levels to watch
A follow-through/sustained weakness below the 1.1400 handle might prompt some additional long-unwinding trade and accelerate the fall further towards the 1.1360-50 support zone. On the flip side, the 1.1445-50 area now seems to act as an intermediate resistance ahead of the key 100-day SMA, around the 1.1475-85 region.