EUR/USD flirts with lows near 1.1225 amid resurgent USD buying

Having consolidated just below 1.1250 levels in early Europe, the EUR/USD pair broke to the downside amid a risk-on rally in the European equities and a broadly higher US dollar.

EUR/USD: Focus shifts to US ADP, ISM

The spot is seen correcting a part of yesterday’s massive rebound, as the greenback regains footing against its main competitors heading into key US economic releases due later today.

The greenback tracks the US yields higher, which benefit from risk-friendly markets environment, backed by higher European equities and oil-price rally. The USD index rebounds from two back-to-back sessions of losses and hovers near daily tops of 97.08, up +0.15% on the day.

Moreover, the EUR/USD pair came under fresh selling pressure after the Euro was left unimpressed by mixed Euro area final manufacturing PMI reports.

Meanwhile, markets digest the latest comments from EU Commission President Juncker, as attention turns towards the US ADP jobs report, jobless claims and ISM manufacturing PMI data slated for release in the NA session.

EUR/USD Technical Levels

Karen Jones, Analyst at Commerzbank noted: “EUR/USD’s consolidation looks to be completing: The Euro’s consolidation phase looks complete and the market is well placed to test the recent high at 1.1268 and the 1.1300 November 2016 high. It will remain bid while above the near term uptrend at 1.1035.” 

“Rallies will find interim resistance at 1.1268 and 1.1300. Above 1.1300, the market has potential to reach the highs from mid 2016 circa 1.1429 and the two year resistance line at 1.1474, however we believe it will struggle here from a longer term perspective. We note the 78.6% retracement lies at 1.1343,” Karen added.