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EUR/USD finds support near 1.1470, Draghi, Brexit on sight

  • The pair briefly tested highs near 1.1490 just to deflate afterwards.
  • The greenback has so far met decent support in the 95.50 region.
  • ECB’s Draghi is due to speak later in the EU Parliament.

EUR/USD is extending the positives start of the week so far, although the rebound from Monday’s low near 1.1450 appears to have stalled in the 1.1490 region.

EUR/USD looks to Draghi, data, Brexit vote

Spot is up for the second session in a row on Tuesday, managing to regain some composure after testing lows in the area of the 10-day SMA near 1.1450 on Monday.

As always, the pair keeps looking to USD-dynamics for near term direction, although the crucial Brexit vote later today carries the potential to be a source of increasing volatility in the risk-associated complex, particularly via EUR/GBP.

In the data space, Spanish and French final December CPI figures are due later, although the focus should be on President Draghi’s speech later in the European afternoon. Across the pond, US Producer Prices for the month of December are due along with January’s NY Empire State index and speeches by FOMC’s Kashkari, George and Kaplan.

What to look for around EUR/USD

All the looks will be upon the Brexit vote later today and its impact on the broad risk appetite trends. Previously, investors would closely follow Draghi’s speech for any clues on the apparent slowdown in some fundamentals in the region and the implications (if any) on the bank’s monetary stance. In the medium/longer term, US-China trade dispute should remain a key driver for the sentiment in the global markets. Further out, Italian politics, the French budget, EU Parliamentary elections and the evident slowdown in German fundamentals in H2 2018 could undermine further bullish attempts in EUR.

EUR/USD levels to watch

At the moment, the pair is gaining 0.12% at 1.1481 and a break above 1.1569 (2019 high Jan.10) would open the door to 1.1585 (61.8% Fibo of the September-November drop) and finally 1.1621 (high Oct.16 2018). On the other hand, immediate contention emerges at 1.1450 (low Jan.10) seconded by 1.1417 (21-day SMA) and then 1.1380 (55-day SMA).

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