The EUR/USD pair extends its upside consolidative phase into a second day this Monday, as the bulls take a breather stepping into a big week ahead.
EUR/USD reverts to 5-DMA at 1.1416
The spot is seen continuing its corrective slide from thirteen-month tops, as the US dollar tries hard to recover some ground amid renewed buying interest seen around Treasury yields, as markets remain expectant of hawkish FOMC minutes.
Markets hope that the Fed minutes would hint towards balance sheet normalization, while shrugging-off concerns over the recent slowdown in price pressures.
Meanwhile, the renewed weakness in EUR/USD can be also attributed to risk-on sentient, which dampens the demand for the Euro as a funding currency. Also, unwinding of the USD shorts amid a profit-taking spree cannot be ruled out as one of the reasons behind the EUR/USD retreat.
Focus now shifts towards the fundamentals, with the Eurozone final manufacturing PMI reports up on the sleeves today, followed by the jobless rate from the Euroland. Also of note for the major remains the US ISM and Markit manufacturing PMI reports due on the cards in the NA session.
EUR/USD Technical Levels
According to Jim Langlands at FX Charts: “1.1450 may well hold again on Monday given the overbought nature of the 4 hour charts, which are now turning lower, but buying dips still seems to be the theme. Keep SL at 1.1385. Back below there could see a slide back to 1.1300, but buying dips still seems to be the plan. Alternatively, selling at current levels with a tight SL placed above 1.1450 may work as a short term plan.”