EUR/USD remains capped by 1.1950 post-EZ data
- DXY recovery caps the upside.
- Bearish bias still intact.
- ECB minutes, US PPI in focus.
The EUR/USD pair stalled its downslide near 1.1930 region and staged a minor comeback only to find fresh offers lurking at the midpoint of the 1.19 handle, as the bulls remain unimpressed by stronger Eurozone industrial figures for the month of November.
EUR/USD: Will the ECB minutes underpin the Euro?
Despite the minor bounce, the spot remains better offered, extending its consolidative mode near weekly lows of 1.1916 into a third consecutive day today.
The resurgence of broad-based US dollar demand continues to keep a lid on the recovery-attempts while tumbling German yields also weigh negatively on the common currency. The 10-year German yields extend its corrective slide from three-month tops to now trade -4% at 0.459%.
However, the losses remain capped amid a risk-averse market environment, as reflected by the negative tone seen in the European equities as well as in Treasury yields. Moreover, the major also derives support from the expectations that the minutes of the last ECB monetary policy meeting will highlight the ongoing economic recovery in Eurozone and prospects of further QE taper.
Meanwhile, the pair paid little attention to the better-than-expected Eurozone industrial production data, which arrived at +1.0% m/m in Nov versus +0.8% expected and +0.4% prior.
Valeria Bednarik, Chief Analyst at FXStreet, writes: “Later today, the ECB will release the Minutes of its latest meeting, but no big surprises are expected there. If something, the document can bring back to the table the fact that the European Central Bank is optimistic about the economic recovery and that it will continue its gradual exit of QE. The US will bring December PPI, the usual weekly unemployment claims, and the monthly budget statement.”
EUR/USD Technical Levels
Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers Ltd, notes: “The pair may stay in extended consolidation between 1.1900 and 1.2000 as overall structure is bullish and recent pullback seen as corrective action ahead of fresh upside. The bullish scenario requires close above cracked 10SMA (1.1989) as an initial bullish signal for extension above 1.2000 for renewed attempts at key barriers at 1.2088 (04 Jan) and 1.2092 (08 Sep) highs. Conversely, the stronger bearish signal could be expected on a sustained break below 1.1900 pivot.”