- Euro’s three-day winning streak has come to a halt near the 200-hour moving average hurdle.
- Dollar sell-off may resume if the European equities report gains.
- A convincing break above the key moving average hurdle could be seen if the Eurozone data beat estimates.
EUR/USD’s three-day winning streak seems to have stalled at the 200-hour moving average (MA) hurdle.
As of writing, the pair is trading at 1.1284, having printed a high of 1.1305 yesterday and the 200 -hour MA is located at 1.1293.
The common currency picked up a bid in the North American session on Tuesday after the US February inflation number missed estimates, validating Fed’s patience on rate hikes. The 10-year treasury yield fell to over two-month lows below 2.6 percent. The spread between the 10-year US and German government bond yields also fell three basis points to 254 basis points yesterday. So, the EUR/USD closed with 0.37 percent gains – its third consecutive daily rise.
The bullish momentum, however, weakened in Asia, possibly due to signs of risk aversion in the equities.
Looking forward, dollar selling may resume if the European equities trade in the green. That said, a better-than-expected Eurozone is required to push EUR/USD well above the 200-hour MA hurdle. The Eurozone industrial production data due at 10:00 GMT is expected to show the factory activity expanded 1 percent month-on-month in January, following a 0.9 percent contraction in December.
Apart from the data, the shared currency could also react to strong dovish/hawkish comments, if any, by ECB’s Mersch. The central bank is scheduled to speak at 08:30 GMT. Brexit related newsflow and the resulting big moves in EUR/GBP could also influence EUR/USD.
Technical Levels
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