• Extends overnight rejection slide from 100-DMA amid resurgent USD demand.
• The downfall seemed unaffected by EZ CPI print and disappointing US housing data.
• All eyes remain glued to the release of FOMC monetary policy meeting minutes.
The EUR/USD pair remained heavily offered through the early North-American session, albeit seems to have found some support near the 1.1520 region, weekly lows.
The pair extended overnight rejection from the vicinity of 100-day SMA, levels beyond the 1.1600 handle, with a combination of negative forces dragging the pair lower for the second consecutive session on Wednesday.
Against the backdrop of Italian budgetary concerns, resurgent US Dollar demand turned out to be one of the key factors exerting some heavy downward pressure on the major, which seemed rather unaffected by today’s mostly in-line Euro-zone final CPI print.
The selling pressure now seems to have receded, at least for the time being, following yet another disappointment from the US housing market data, showing that housing starts and building permits declined 0.6% and 5.3% respectively in September.
The rebound, however, seemed lacking any strong conviction as traders now seemed reluctant to place any aggressive bets ahead of today’s key event risk – the latest FOMC monetary policy meeting minutes, which might provide clues over the central bank’s rate hike path beyond 2018 and eventually provide some fresh directional impetus.
Valeria Bednarik, FXStreet’s own American Chief Analyst explains, “the 4 hours chart shows that it’s accelerating its decline below bearish 20 and 100 SMA, both now below the 38.2% retracement of the same slide, as technical indicators extend their slumps within the negative ground. The bearish momentum will likely accelerate on a break below 1.1500, although market players may well prefer to wait for US FOMC’s Minutes before taking some firmer positions.”