EUR/USD tested Friday’s high at 1.1942 en route 1.2000

The EUR/USD pair extends its upside consolidation phase into Europe, moving back and forth in a 25-pips narrow range, as focus shifts to the Eurozone CPI and US payrolls data for the next direction.

EUR/USD: Eyes a break above 1.1960 for further upside       

The sentiment around the common currency remains lifted amid no jawboning on the EUR attempted by the ECB President Draghi at the Jackson Hole Symposium, which suggested that the ECB policymakers are not as worried about the recent Euro appreciation as perceived by many.

Moreover, ongoing US dollar weakness against its major peers, as the Fed Chair Yellen maintained silence on the monetary policy, also keeps the upward momentum intact around the EUR/USD pair.

Furthermore, tepid recovery seen around Treasury yields combined with negative European equities also boost the funding currency status of the Euro, pushing the rate further towards two and a half years highs reached in early Asia at 1.1960.

Moving on, the major will take fresh cues from the broader market sentiment and USD price-action, in absence of relevant macro news from the Euroland, while the US goods trade balance data may help keep the US traders busy in the day ahead.

EUR/USD Technical Set-up  

According to Slobodan n Drvenica at Windsor Brokers Ltd., “Near-term focus turns towards 1.2000 target, which marks strong psychological / option barrier and the price may show stronger hesitation on approach. Overbought slow stochastic on daily chart supports the notion. Mild downside action was seen so far, however, stronger dips cannot be ruled out. Good supports lay at 1.1900 zone and 1.1845 (Fibo 38.2% of 1.1662/1.1959 upleg) with 10/20SMA bull-cross forming at 1.1800 and underpinning the action.”