EUR/USD advances to fresh sesison highs on USD weakness

The EUR/USD pair moved sideways in a 20-pip channel between 1.1130 and 1.1150 for the majority of the day but gained traction in the second half of the NA session and touched its session high at 1.1163 in the last minutes. As of writing, the pair is trading at 1.1160, up 0.23% on the day.

Although a fundamental development hadn't supported this recent rise, the sell-off witnessed in the greenback helped the pair gather momentum. After recording gains in the early NA session, the U.S. Treasury bond yields started to edge lower as the risk appetite faded amid falling equity indexes, and weighed on the US Dollar Index. At the moment, the index is at its session low at 97.22, losing 0.18% on the day.

Furthermore, after dropping sharply in the European session, the EUR/GBP retraced its losses as the political uncertainty hurt the demand for the cable, allowing the euro to strengthen against its other rivals as well. In fact, as of writing, the Euro Index is gaining 0.17%, at 90.30.

The ECB will release its Economic Bulletin on Thursday in the European morning. Later in the day, weekly initial jobless claims will be released from the U.S. ahead of the FOMC member Powell's speech. However, none of these events are likely to make the pair break out of its two-month-old trading channel.

Technical outlook

FXStreet analyst Valeria Bednarik explains that from a technical point of view, the pair has found some support around 1.1125 the 23.6% retracement of its latest bullish between 1.0606, April 10th low, and the high set this June at 1.1295. She further adds that the pair has also a relevant low at 1.1109 posted on May 30th, with the lowest for the last five weeks being 1.1075, reached on May 18th and a break below this last will likely open doors for a steeper downward move, moreover as the price keeps moving away from the critical 1.1300 mark.

According to the analyst, resistances could be seen at 1.1220, 1.1260 and 1.1300.

• EUR/USD neutral/bearish near term – Scotiabank
• EUR/USD still room for a test of 1.1100 – UOB