EUR/USD can't catch a bid on its own accord, FOMC fuelling dollar weakness

Currently, EUR/USD is trading at 1.0589, up 0.98% on the day, having posted a daily high at 1.0616 and low at 1.0481.

EUR/USD has rallied vrs dollar weakness, in part by FOMC minutes, but the euro has so far been unable to move in a positive direction on its own merit with indeed, an improving growth & inflation outlook.

Analysts at Bank of Tokyo Mitsubishi explained, "The euro is deriving only limited support from further evidence of positive economic developments in the euro-zone. Economic data releases over the last month or so have surprised strongly to the upside in the euro-zone as the recovery appears to have strengthened. The release yesterday of the latest composite PMI survey provided a further encouraging signal revealing that business confidence in December increased to its highest level since May 2011. It prompted Markit to state that their surveys were consistent with the economy expanding by 0.4% in Q4 with risks tilted to the upside."

Positive effects of a weak euro

The analysts also noted that the weak euro was cited as boosting goods exports and encouraging demand for services exports such as tourism. "The weak euro is also helping to ease downside risks to the inflation outlook in the euro-zone. The latest CPI report revealed that the annual rate of headline inflation accelerated sharply to 1.1% in December moving back above the core rate for the first time since 2013 driven mainly by higher commodity prices. Core inflation remains more subdued increasing by an annual rate of 0.9% in December. It is expected to pick up only gradually in the year supporting the ECB’s recent decision to extend QE until the end of the year. The continuation of the ECB’s loose monetary policy stance should remain a weight on the euro for most of this year."

Nonfarm Payrolls Preview: could surprise to the upside, but still not be enough to save the greenback

EUR/USD levels

With spot trading at 1.0589, we can see next resistance ahead at 1.0616 (Daily High), 1.0639 (Daily Classic R3), 1.0663 (Weekly Classic R1), 1.0763 (Monthly High) and 1.0802 (Weekly Classic R2). Support below can be found at 1.0570 (Daily Classic R2), 1.0539 (Hourly 20 EMA), 1.0528 (Daily Classic R1), 1.0525 (Weekly High) and 1.0518 (Weekly Classic PP). 

EUR/USD technicals still remain bearish - Scotiabank