“¢ A modest USD pull-back helped bounce off monthly lows and snap two days of losing streak.
“¢ Optimistic comments by EU’s Moscovici eased Italian concerns and provided a minor lift.
The EUR/USD pair built on its intraday recovery move and climbed to fresh session tops, closer to the key 1.1500 psychological mark in the last hour.
Having retested monthly lows, around the 1.1435-30 region, the pair staged a goodish rebound and for now, seems to have snapped three consecutive days of losing streak. The initial leg of an uptick was supported by a modest US Dollar pull-back from multi-week tops, despite a positive tone around the US Treasury bond yields.
Meanwhile, the latest leg of an uptick over the past hour or so could further be attributed to some optimistic comments by the European Affairs Minister Pierre Moscovici, saying that they could manage the different views on Italy’s budget proposals with a dialogue and he wants to reduce tension with Italy.
Adding to this, a strong opening in the US equity markets further dented the USD’s relative safe-haven status against its European counterpart and remained supportive of the positive momentum, which got an additional boost following a yet another disappointment from the US existing home sales data.
It would now be interesting to see if the pair is able to build on the positive momentum or the current bounce is seen as an opportunity to initiate some fresh selling positions. Market participants now look forward to scheduled speeches by Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan in order to grab some trading opportunities on the last day of the week.
Technical outlook
Valeria Bednarik, FXStreet’s own American Chief Analyst writes: “In the 4 hours chart, the price remains far below bearish moving averages, which accelerated their slumps. The 20 SMA, now converges with the 23.6% retracement of its latest decline at around 1.1520, reinforcing the resistance area. Below the 1.1430 level, the pair has room to extend its decline down to 1.1300, the yearly low settled last August.”
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