- Volatile within 50-pips range, as bulls lack momentum to take-out 1.1680 10-DMA barrier.
- Keeps the rebound intact, despite downbeat Eurozone current account data.
EUR/USD stalled its latest leg lower near 1.1630 region, now trying hard to extend the bounce above the midpoint of the 1.16 handle.
EUR/USD: 10-DMA – a tough nut to crack
The spot witnessed good two-way trading so far this Friday, but remained confined within a 50-pips trading range, as resurfacing worries over the Italian political climate keeps a lid on the upside while the losses remain capped amid broad-based US dollar weakness following Trump’s negative comments on the US interest rates hike outlook.
The Italian political risks returned to markets amid escalating tensions within the coalition government. Meanwhile, comments from the Italian Head of the budget committee at the Lower House Claudio Borghi also continues to weigh down on the common currency.
Also, downbeat Eurozone current account data could keep the recovery attempts short-lived, as markets continue to track the broader market sentiment amid a lack of significant fundamental drivers.
EUR/USD Technical Levels
Slobodan Drvenica at Windsor Brokers noted, “fresh bullish momentum supports today’s action, together with bullish divergence on daily chart slow stochastic, which could keep the downside protected for the time being. Recovery needs extension above falling 10SMA (1.1681) to sideline downside risk and open way towards key near-term barrier, provided by falling 55SMA (1.1710). Bearish scenario requires close below Fibo 61.8% (1.1616) to weaken near-term structure for a retest of Thursday’s spike low at 1.1574, break of which would signal a continuation of bear-phase from 1.1790 towards key support at 1.1508 (1.1508). Res: 1.1681; 1.1710; 1.1744; 1.1790. Sup: 1.1616; 1.1574; 1.1527; 1.1508.”