EUR/USD down to test 1.1800, Spanish politics in focus

EUR/USD’s bullish run lost steam just shy of 1.1850 levels, knocking-off the rate back to test 1.18 handle, as the bulls turn wary ahead of Spain’s PM Rajoy’s press conference.

EUR/USD eases-off 2-week tops

The spot erased almost entire gains and now trades just ahead of 1.1800 levels, as a cautious tone sets into the markets amid revival of tensions surrounding the Spanish political climate.

Mariano Rajoy Spain PM - Live Press Conference

Markets gear up for the presser by Spain’s PM Rajoy due out shortly for fresh insights on the Catalan drama, after Catalonia’s leader Carles Puigdemont left doors open for last minute negotiations.

Meanwhile, the latest leg lower in EUR/USD can be also attributed to resurgent USD demand, as markets resort to repositioning ahead of the FOMC minutes release. The USD index recovers losses to trade flat at 93.10 levels.

EUR/USD Technical View

Karen Jones, Analyst at Commerzbank wrote: “EUR/USD continues to see 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 1.1831/38 20 and 55 day moving averages. This guards the 1.1914 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”.