EUR/USD: Upside remains capped below 1.1085/90 with eyes on EU summit
|- EUR/USD stays inside the rising channel but fails to overcome 1.1085/90 multiple resistance area.
- ECB policymakers differ from favoring further monetary easing.
- A lack of major data keeps highlighting Brexit drama for fresh impulse.
Despite benefiting from downbeat US data and shift in ECB policymakers’ bias, the EUR/USD pair stays below key resistance-zone while taking rounds to 1.1077 ahead of Thursday’s European open.
The US Dollar Index (DXY) got additional disappointment, in the form of September month Retail Sales, other than the US-China trade tussle that dragged it down to fresh seven-week low on Wednesday.
Adding to the pair’s strength was upbeat comments from the European Central Bank (ECB) policymakers, namely Chief Economist Philip Lane and council member François Villeroy de Galhau. Both the policymakers refrained from providing any more supports to further monetary policy easing. Additionally, Robert Holzmann and Klaas Knot, the hawks, demanded a radical change under the incoming President Christine Lagarde while also supporting fiscal measures for the betterment of the regional economy.
Elsewhere, the European Union (EU) policymakers keep struggling to announce a final Brexit deal with the United Kingdome (UK) and stretched the talks to Thursday before holding the two-day-old EU summit. The British policymakers are yet to gain the Democratic Unionist Party (DUP) support for the deal that could be agreed with the EU.
Risk sentiment has been downbeat amid challenges to the US-China trade deal and Brexit uncertainty with the stocks and bonds in Asia showing fewer pleasant signs by the press time.
While Brexit is the main driver for the pair and the market as of now, second-tier data from the United States (US) and Fedspeak could keep entertaining traders in the meantime.
Technical Analysis
Not only 1.1085/90 area, including multiple highs marked since early-September, but the upper-line of multi-week-old rising channel, at 1.1110, also challenges pair buyers. On the contrary, a downside break of 1.1020 could recall sellers targeting 1.0900 and early-month low nearing 1.0880.
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