EUR/USD: Upside appears capped by 100-DMA, focus on EUR/GBP

• Broad USD weakness amid Fed pause risks continues to support EUR/USD.
• USD dynamics, EUR/GBP flows to remain the key drivers ahead of US data, Brexit vote and Fed.

The EUR/USD pair extends its bullish consolidation phase above the 1.14 handle into early European trading, trapped between the 20-DMA support at 1.1419 and 100-DMA upside barrier at 1.1445.

The spot continues to remain underpinned by ongoing bearish momentum seen around the US dollar across its main competitors, as markets have already priced-in a dovish FOMC statement, hinting towards a pause in the Fed’s policy normalization amid dwindling US economic outlook.

On the EUR-side of the equation, the EUR bulls were unfazed by the ECB Chief Draghi’s reiteration that the balance of risk to economic outlook moves to downside, as the US dollar dynamics continue to remain the exclusive driver so far this week.

Looking ahead, the pair is likely to get influenced by the sentiment around the greenback while the EUR/GBP flows will also have a major impact on the common currency heading into the UK Parliamentary vote on Brexit Plan B later on around 1900 GMT.

EUR/USD Technical Levels