EUR/USD consolidates minor-recovery above 1.05, awaits PMIs

The bulls appear to have lost ground over the last hours, capping the recovery-attempts in EUR/USD from multi-week lows struck at 1.0495 in the US last session.

The spot is seen defending corrective gains as the USD bulls take a breather, after yesterday’s extensive rally backed by upbeat US jobless claims and rising March Fed rate hike expectations. The USD index attempts a minor-correction from seven-tops reached at 102.27, and now trades at 102.05, down -0.10% on the day.

The bounce in the major can be also partly attributed to persisting risk-off moods in the mark, in wake of tumbling Asian stocks and treasury yields. Additionally, a bout of profit-taking in the USD longs also cannot be ruled out, especially ahead of a bevy of Fed officials lined up to make their respective speeches in NA session. However, Fed Chair Yellen’s speech will be the most awaited, as investors look for more confirmation to seal in a March Fed rate hike.

The immediate focus now remain on the German retail sales and final services PMI reports from across the Euro area due later in the EUR session. While the US docket has the ISM non-manufacturing PMI release.

EUR/USD Technical Levels

Haresh Menghani, Analyst at FXStreet explained, “With short-term technical indicators already in bearish territory, a decisive break below the 1.0500 psychological mark would confirm bearish expectations and open room for a fresh leg of downslide for the pair, initially towards mid-1.0400s (Jan. 11 low) before eventually dropping to 1.0400-1.0390 support area.”

“On the upside, 61.8% Fibonacci retracement level near 1.0525-30 region now seems to act as immediate resistance. Any further recovery above this immediate resistance should now confront heavy supply at an important support break-point, now turned strong resistance near 1.0550-55,” Haresh added.