EUR/USD headed back towards 1.1735/30 support?

Having failed to sustain at higher levels, the EUR/USD pair trimmed gains to test the 1.18 handle amid broad based US dollar recovery in sync with Treasury yields.

EUR/USD clings to 5-DMA support at 1.1794

The spot rallied hard in the overnight trades and reached three-day tops at 1.1816 in early Asia, as the US dollar was dumped across the board on lackluster US housing data.

However, the spike above 1.18 handle was short-lived, as the US bulls staged a solid comeback after the 10-year Treasury yield spiked 4 basis points on global equity-surge led better investor risk appetite, which reduced the demand for the safe-haven Treasuries.

Meanwhile, markets continue to digest the latest updates surrounding the next Fed Chair appointment as well as on the US tax overhaul plans, which also affects the sentiment around the buck, eventually impacting the EUR/USD pair.

Trump: Want tax reform "by Christmas"

The EUR markets also assess the Reuters headlines reported overnight, citing a government source, as saying that, "Catalonia’s regional president told a meeting of his party he would formally declare independence if Spain starts the process of suspending the region’s autonomy on Thursday."

Calendar-wise, there is nothing relevant due out from the Euroland and hence, attention turns towards the US docket, with the jobless claims and Philly Fed manufacturing index slated for release.

EUR/USD Technical View

Analysts from Brown Brother Harriman (BBH) noted: “In essence, the first head and shoulders pattern was part of the head of a larger head and shoulders pattern. Even if one does not subscribe to technical analysis, the takeaway may be important. First, the bearish technical view would be weakened by a euro move back above the larger shoulders ($1.1880-$1.1910). Second, a break of the $1.1660 area could spur further liquidation of long euro speculative positions. A break of $1.1600 area would signal a move toward $1.1250, not far from the 50% retracement of this year's euro advance.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.