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  • Fresh US dollar selling re-energizes the EUR bulls, as risk-on persists.
  • German Ifo – Upbeat across all indicators, underpins the bounce.
  • Will it regain the 1.18 handle ahead of ECB Draghi’s speech?

The offered tone around the greenback is seen growing bigger in the European session, now pushing the EUR/USD pair back towards the 1.18 handle, as a recovery in risk appetite weighs down on the demand for the safe-haven US dollar.

The US dollar, when measured against a basket of major currencies, fell sharply from a high at 94.37 to now trade near daily lows of 94.09, down -0.11% on the day. The recovery in the European equities lifted the risk sentiment while Treasury yields also climbed higher across the curve.

The common currency also received a fresh boost from better-than-expected German Ifo surveys, adding extra legs to the renewed upside in the spot. German Ifo business climate index eases to 103.7 in September, beats estimates

However, markets remain doubtful whether the major would regain the 1.1800 level ahead of the ECB President Draghi’s testimony scheduled at 1300 GMT.  Draghi is due to testify about the economy and monetary policy before the European Parliament Economic and Monetary Affairs Committee, in Brussels.

EUR/USD Technical Levels

Slobodan Drvenica at Windsor Brokers noted: Daily techs show MA’s in bullish setup and strong momentum, but RSI is flat and slow stochastic showing initial signs of reversal, together giving a mixed signal. Break of initial support at 1.1720 zone (former highs / rising 5SMA) would signal further easing and expose pivotal supports at 1.1683 (rising 10SMA) and 1.1660/55 (converging 100/20SMA), break of which would signal deeper pullback. The single currency is expected to track British pound, however, consolidation with lower pace could be expected ahead of Wednesday’s FOMC meeting which could generate stronger direction signal. Res:  1.1752; 1.1780; 1.1802; 1.1848. Sup:  1.1720; 1.1683; 1.1655; 1.1617.”