The EUR/USD pair found support just ahead of 1.0880 levels and reverted towards 1.09 handle. However, the bears continue to guard the last amid a broadly firmer US dollar.
The US dollar is on a steady recovery mode from multi-month lows against most of its major peers, in the wake of rising treasury yields, as the bulls cheer reports of a financial shutdown being averted by the US government.
Moreover, last week’s dovish outcome from the ECB policy meeting also continues to keep the sentiment around the Euro undermined. The ECB kept its policy steady, while noting that the policymakers hadn’t discussed a QE exit strategy and that they could extend the QE beyond 2018 if deemed necessary.
Meanwhile, the losses in EUR/USD remain limited as investors gear up for a fresh batch of US macro news, especially after unimpressive US economic reports released last Friday. The US economy grew at sluggish 0.7% in Q1 2017, having expanded at its slowest pace in three years.
The spot is expected to waver in a narrow range in the day ahead, in absence of fundamental drivers, as major European markets remain closed in observance of Labor Day. Hence, attention turns towards a flurry of economic data due on the card from the US docket after the scheduled speech from the US treasury secretary Mnuchin.
EUR/USD Technical Levels
Technical resistances for the pair are aligned at 1.0931/33 (classic R3/ Apr 27 high), 1.0950/51 (psychological levels/ 5-month tops) and finally 1.1000 (key resistance). On the flip side, the spot finds next support at 1.0858/50 (10-DMA/ Apr 27 low), a break below that level could open the door to 1.0819 (Apr 24 low) and 1.0800 (round number).