EUR/USD headed back to 1.1880 on ECB taper talks, US CPI – Key
The EUR/USD pair staged a minor comeback from near 1.1825 region in Asia, as the bulls found some support from the latest chatter over the ECB QE taper, as reported by Bloomberg.
EUR/USD: All eyes on US CPI and retail sales data
The spot is seen printing daily highs near the midpoint of 1.18 handle, as the sentiment around Euro received a fresh boost from the Bloomberg headlines, quoting the officials familiar with the debate that the ECB is said to be considering cutting QE to 30bn a month from January 2018 .
The ECB QE taper talks offer fresh impetus to the EUR bulls, as the ECB Chief Draghi’s speech turned out to be dovish, which intensified the retreat in the EUR/USD pair from two-week highs of 1.1880 levels. ECB’s Draghi: ECB pledge to keep rates low “well past” QE is key – Reuters
Focus now remains on the interest rates differential between both continents, as investors gear up for the highly anticipated US CPI data due on the cards later today. The US inflation data holds the key on the future rate hike prospects, after the Sept FOMC meeting showed that the Fed members remain concerned over the inflation outlook. FOMC Minutes: Many Fed officials saw another rate hike warranted this year
Meanwhile, markets will pay close attention to the updates on the ongoing political tensions in Spain for further direction on the Euro.
EUR/USD Technical View
Valeria Bednarik, Chief Analyst at FXStreet wrote: “The 4 hours chart shows that technical indicators keep retreating from overbought levels, still in positive territory, while a bullish 20 SMA extends above the 100 SMA below the current level, a sign that the ongoing decline could be just corrective. The 38.2% retracement of the mentioned rally comes at 1.1795, the level to break to confirm additional declines ahead. Support levels: 1.1825 1.1795 1.1760 Resistance levels: 1.1890 1.1930 1.1965.”