EUR/USD swings back above 1.1800 on Article 155 trigger news

The EUR/USD pair stalled its retreat and rebounded nearly 40-pips on the Spanish government spokesman Mendez comments, with the bulls now trying hard to hold above 1.18 handle once again.

EUR/USD: Volatile on Spanish political drama

The spot witnessed good two-way businesses so far in Europe, as the latest developments on the Catalan independence campaign continue to drive the sentiment around the Euro.

The latest upswing in the major can be attributed to the comments by Mendez, as he confirmed the implementation of Article 155 of the Constitution on Saturday, after Catalonia’s leader Puigdemont’s threatened the Spanish PM Rajoy to declare formal independence if he persisted in preventing any dialogue.

 Meanwhile, it remains to be seen for how long the major can survive above 1.18 handle, as the US dollar recovers losses against its main peers, while EUR market continues to get affected by the headlines surrounding Spanish political environment.

Also, markets may remain cautious, as the 2-day Brexit/ EU Summit gets underway, which could also keep further recovery in check. Ahead in the day, the pair will look forward to the US datasets for near-term trading opportunities.

EUR/USD Technical View

According to Valeria Bednarik, Chief Analyst at FXStreet: “Technical indicators in the mentioned (4-hour) chart are turning south around their mid-lines, reflecting the latest short-term slump rather than indicating further slides ahead. The main support continues being the 1.1720 level, as a break below it would expose 1.1660. To the upside, the main resistance is the 1.1820/30 region, with steady gains beyond the level required to see the pair shrugging off the current negative stance.”