EUR/USD: Bulls gathering pace for a test of 1.1200?

The EUR/USD pair extended the overnight upside consolidative mode into Europe, and now looks to regain poise, as the bulls gear up to conquer 1.1200 in the day ahead.

EUR/USD capped below 10-DMA at 1.1180

The spot is seen trying hard to extend the previous rally so far this session, with a minor bid seen amid a steady decline seen in the US dollar against its main competitors, as Treasury yields continue to trade in the red zone. The USD index flirts with three-day lows of 97.15, looking to test 97 handle.

On Wednesday, oil prices continued their sell-off, with WTI hitting the lowest levels since August, which spooked market sentiment and weighed down on risk assets such as Treasury yields, dragging the greenback broadly lower. Meanwhile, markets largely ignored upbeat US existing home sales data, as the sentiment was driven by oil price-action.

Later today, there is very little on the cards in terms of fundamentals from the calendar, and hence, the major will track the USD dynamics and EUR/GBP cross, especially after yesterday’s hawkish BOE chief economist Haldane’s comments induced sharp drop.

In the NA session, the usual weekly jobless claims from the US will offers some incentives on a data-dry trading day, while the Fedpeaks will also remain in focus.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet explains: “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. 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.”

“In the meantime, the short term picture remains neutral-to-bearish, with the price holding below a strongly bearish 20 SMA that already broke below the 100 SMA, whilst technical indicators hold directionless near oversold readings. Support levels: 1.1110 1.1075 1.1030 Resistance levels: 1.1220 1.1260 1.1300,” added Valeria.