EUR/USD sits at weekly tops of 1.1790, eyes on Catalan independence

The EUR/USD pair printed fresh weekly tops at 1.1790 in early trades, and thereafter drifted lower to session lows of 1.1763, before meeting fresh demand near the last that sent the rate higher in a bid to challenge the daily tops.

Eyes on Catalan leader Puigdemont’s speech

The bears continue to guard the 1.1800 barrier, despite solid German industrial and trade figures, while yesterday’s hawkish comments from the ECB policymaker Sabine Lautenschläger, also failed to push the EUR/USD through the 1.1785/90 resistance.

The stalled upside in the spot can be mainly attributed to the increased nervousness across the financial markets, as investors refrain from creating fresh positions in the Euro ahead of the Catalan President Puigdemont’s speech due later today, which could trigger huge volatility, as an independence declaration could intensify the internal Spanish political tensions.

Meanwhile, “economic pressures are also increasing the pressure on Catalan leaders as more major business announced they will move their headquarters out of the region.  France and Germany have also expressed their support for a united Spain,” the analysis team at Rabobank explained.

On the USD-side of the story, the greenback continues to suffer size-able losses across its main competitors, as renewed North Korea fears continue to have a negative impact on the buck.

Markets now await the Catalan leader’s speech for fresh direction on the pair, while FOMC member Kashkari speech is expected to have limited impact on the prices.

EUR/USD Technical View

Karen Jones, Analyst at Commerzbank noted: “EUR/USD is seeing a small rebound from the 1.1662 August low. Intraday rallies have so far been relatively tepid and will find initial resistance at 1.1833 end of September high and the 1.1833/36 20 and 55 day moving averages. This guards the 1.1924 resistance line. We would treat a break below 1.1660 as the trigger for a sell off to the mid-June high at 1.1296 and the more important 1.1110 end of May low”.