“¢ The USD selling remains unabated and kept pushing the pair higher.
“¢ Technical buying above 1.1720-25 hurdle accelerate the momentum.
The EUR/USD pair finally managed to make it through an important barrier and spiked to the highest level since early July, above mid-1.1700s.
Despite an intraday rebound in the US Treasury bond yields, the US Dollar kept losing ground through the mid-European session and was seen as one of the key factors driving the pair higher.
Adding to this, possibilities of some short-term trading stops being triggered above the 1.1720-25 supply zone seems to have further collaborated towards accelerating the positive momentum over the past hour or so.
Apart from broad-based USD weakness, and some technical momentum, the up-move lacked any obvious fundamental catalyst and hence, it would be prudent to wait for a strong follow-through buying before positioning for any further appreciating move.
Next on tap will be the US economic docket, featuring the release of Philly Fed Manufacturing Index, usual initial weekly jobless claims and existing home sales data, which will be looked upon for some short-term trading opportunities.
Technical levels to watch
A follow-through buying has the potential to continue lifting the pair towards 1.1790 region, above which the momentum could further get extended towards the next major hurdle near mid-1.1800s.
On the flip side, the 1.1720-25 resistance break-point now seems to protect the immediate downside and is followed by the 1.1700 handle, which if broken might negate prospects for any further up-move.
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