The EUR/USD pair advanced further on Tuesday and reached its highest level in almost two weeks as investors brace for the ECB lift off, while the greenback faced selling pressure across the board.
Speculations that the ECB might consider a 50 basis point rate hike when the Governing Council meets on Thursday propelled the EUR/USD to above 1.0200.
The EUR/USD pair is currently trading at the 1.0220 area, recording a 0.8% daily gain, having reached its highest level since July 6 at 1.0269.
The U.S. dollar was unfazed by low-key data. June Building Permits declined to 1.685M, but beat the market’s expectations of 1.65M. Housing Starts, on the other hand, fell 2% in the same month to 1.559M missing the market’s expectations of 1.585M. The US dollar index continues to soften and steps back to a 13-day low of 106.40 as capitals flow to riskier assets.
The technical outlook for the EUR/USD remains bearish overall, although short-term indicators show dwindling downward momentum. On the daily chart, the RSI continues to gain a positive slope and advances towards its midline, while the MACD keeps printing smaller red bars, reflecting the decreasing selling interest.
Critical short-term resistance is seen at the 20-day SMA, currently at 1.0294. A break above this level would pave the way to the 1.0350 and 1.0400 areas en route to the upper-bound of a descending channel, currently around 1.0540.
On the other hand, support levels are seen at the 1.0120 area, followed by 1.0100 and the 1.0000 level.
Speculations that the ECB might consider a 50 basis point rate hike when the Governing Council meets on Thursday propelled the EUR/USD to above 1.0200.
The EUR/USD pair is currently trading at the 1.0220 area, recording a 0.8% daily gain, having reached its highest level since July 6 at 1.0269.
The U.S. dollar was unfazed by low-key data. June Building Permits declined to 1.685M, but beat the market’s expectations of 1.65M. Housing Starts, on the other hand, fell 2% in the same month to 1.559M missing the market’s expectations of 1.585M. The US dollar index continues to soften and steps back to a 13-day low of 106.40 as capitals flow to riskier assets.
The technical outlook for the EUR/USD remains bearish overall, although short-term indicators show dwindling downward momentum. On the daily chart, the RSI continues to gain a positive slope and advances towards its midline, while the MACD keeps printing smaller red bars, reflecting the decreasing selling interest.
Critical short-term resistance is seen at the 20-day SMA, currently at 1.0294. A break above this level would pave the way to the 1.0350 and 1.0400 areas en route to the upper-bound of a descending channel, currently around 1.0540.
On the other hand, support levels are seen at the 1.0120 area, followed by 1.0100 and the 1.0000 level.