EUR/USD recovers further to test 1.0600 amid negative equities

The EUR/USD regains poise and now extends the upside in a bid to reclaim 1.06 handle, in wake of broad based US dollar correction and poor sentiment around the European stocks.

EUR/USD: Will its sustain the recovery?

Currently, EUR/USD jumps +0.37% to trade near fresh daily highs of 1.0597, now looking to regain 5-DMA barrier located at 1.0614. The main currency pair is seen on a steady recovery path so far this session, with the EUR bulls gaining further momentum post-European open, after uncertainty over the Italian banking sector rescue plan crept into markets and weighed negatively on the European stocks, triggering a fresh risk-off wave and boosting the funding currency status of the EUR.

Moreover, extension of the downside correction in the US dollar against its main peers, after last week’s rally on an imminent Fed rate hike this month, also added to the renewed uptick in EUR/USD.

Attention now turns towards tomorrow’s German ZEW sentiment and Wednesday’s US retail sales and PPI data before a typical calm set into the market before the Fed decision.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0614 (5-DMA). A break beyond the last, doors will open for a test of 1.0623 (20-DMA) and from there to 1.0646 (10-DMA). On the flip side, the immediate support is placed at 1.0526 (5-day low) below which 1.0503 (multi-month low) and 1.0456 (March 2015 low) could be tested.