- Disappointing Eurozone fundamentals, USD bounce to keep the bearish pressure intact.
- Technical set up points to further downside risks heading into the Eurozone final CPI, US housing data and FOMC minutes.
The bid tone around the US dollar keeps growing bigger heading into the early European trading, keeping the EUR/USD pair near the lower bound of today´s trading range below the 1.16 handle, as the immediate focus now remains on the Eurozone final CPI figures due at 0900 GMT.
The common currency continues to remain undermined by downbeat Eurozone economic news after the ZEW survey showed worsening business sentiment across the Euro area amid the Italian budgetary concerns and looming trade tensions.
Meanwhile, the divergent monetary policy outlooks between both continents remain USD-positive, especially with the minutes of the Sept Fed monetary policy meeting likely to show that the Fed remains on track for four rate hikes next year. Also, stronger US fundamentals and a solid performance on the Wall Street overnight lift the sentiment around the greenback.
EUR/USD Technical levels
FXStreet´s Chief Analyst, Valeria Bednarik, notes “In the 4 hours chart, a bullish 20 SMA converges with a bearish 100 SMA a couple of pips below the current level, and around the 38.2% retracement of the same decline, reflecting the absence of directional strength. The Momentum indicator advances around its mid-line, while the RSI indicator continues consolidating around 58, leaning the risk to the upside, despite the lack of directional momentum. Support levels: 1.1575 1.1530 1.1500. Resistance levels: 1.1620 1.1660 1.1700.”