EUR/USD on its way to 1.1800, key data & central bankers’ speeches eyed

The EUR/USD pair stalled its rebound from seven-week troughs in Asia, as the bulls take breather ahead of an eventful economic calendar today, with the key focus on the US jobs and central bankers’ speeches.

EUR/USD: 1.1780 – a tough nut to crack

After the overnight retreat, the EUR/USD pair regained poise in Asia and headed back to test the key resistance located near 1.1780 levels amid ongoing weakness seen in the US dollar and Treasury yields, in the wake of Fed leadership talks and uncertainty over Trump’s fiscal reforms.

The latest leg up in the major can be also attributed to somewhat easing political jitters surrounding the Catalan referendum vote, after the region’s secessionist leader Carles Puigdemont was quoted as telling the BBC that Catalonia will declare independence “in a matter of days”.

However, the sellers continue to lurk at higher levels, restricting further recovery-mode to reclaim 1.18 handle, as nervousness creeps into the markets ahead of the speeches by the ECB President Draghi and Fed Chair Yellen due later on Wednesday. Monetary policy divergence will remain the main driver in the session ahead, which could offer fresh support to the USD bulls.

Meanwhile, a fresh batch of Euro area final services PMI data will be reported, followed by the Eurozone retail sales data, as full markets return in Europe. Also, markets look forward to the US ADP jobs and US ISM non-manufacturing PMI releases for fresh take on the Fed’s rate hike outlook.

EUR/USD Technical Set-up  

Valeria Bednarik, Chief Analyst at FXStreet noted: “In the 4 hours chart, an early attempt to recover ground was contained by selling interest around a flat 20 SMA, currently around 1.1770, while technical indicators remain within bearish territory, with limited downward strength amid the restricted intraday action seen this Tuesday. The key support, in the case of further slides comes at 1.1660, August monthly low, with a break below the level opening doors for an extension towards 1.1460 the level that contained rallies for most of 2015 and 2016. The bearish pressure may ease on a recovery above the 1.1820/30 region, but a stronger advance is still out of sight.”