“¢ The US political uncertainty/growth woes keep the USD bulls on the defensive.
“¢ The pair stalls last week’s sharp rejection slide from the 100-day SMA barrier.
The EUR/USD pair built on its steady intraday climb, with bulls now looking to extend the positive momentum further beyond the 1.1400 handle.
The pair regained positive traction on the first day of a holiday-shortened week and recovered a part of Friday’s sharp intraday fall of around 120-pips. A combination of negative forces exerted some fresh downward pressure on the US Dollar, which was eventually seen as one of the key factors driving the pair higher.
The partial US government shutdown, which could continue to January 3, coupled with concerns over the US economic prospects, further aggravated by flattening the US Treasury bond yields failed to assist the greenback to build on Friday’s goodish rebound from one-month lows and extended some support to the major.
It, however, remains to be seen if bulls are able to maintain their dominant position amid relatively thin liquidity conditions ahead of the year-term/Christmas/new-year holiday season and absent relevant market-moving economic releases, either from the Euro-zone or the US.
Technical levels to watch
A strong follow-through buying has the potential to continue lifting the pair further towards the 1.1445-50 supply zone, above which bulls are likely to make a fresh attempt towards clearing the 100-day SMA barrier, near the 1.1480 region, and reclaim the key 1.1500 psychological mark.
On the flip side, the 1.1370-60 region now seems to have emerged as immediate support to defend, which if broken decisively might turn the pair vulnerable to accelerate the fall further towards challenging the 1.1300 handle before eventually dropping to test the 1.1270-65 horizontal support.
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