EUR/USD bounces-off July-end lows, US GDP in focus

• Markets digest ECB-speaks
• DXY consolidates near 3-month highs
• US Q3 GDP on tap

The EUR/USD pair came under fresh selling pressure and refreshed three-month lows at 1.1616 levels on the European open, but quickly reversed the dip to head back towards the mid-point of 1.16 handle amid the latest ECB-speaks.

EUR/USD manages to stay above 1.16 handle

The spot is seen making several recovery attempts over the last hours, but the sentiment around the Euro remains weak, in the wake of yesterday’s ECB’s dovish taper announcement and some of the ECB Governing Council members’ dissent on the same.

However, the major managed to find fresh bids near July-end lows of 1.1613 and bounced again, after the latest comments from ECB Villeroy offered some respite to the EUR bulls. ECB Villeroy noted that the QE taper decision is justified by the confidence that inflation will gradually converge towards 2% ECB’s target.

Meanwhile, stalled USD buying across the board combined with the reports of the Spanish government looks to regain the grip on the Catalonia also capped the downside in the spot.

Focus now remains on the Spanish political headlines and US growth numbers for further momentum on the prices.

EUR/USD Technical Levels

Karen Jones, Analyst at Commerzbank explains: “EUR/USD has closed below 1.1662 the 17th August low and in doing so completed a top 1.2092-1.1662, this measures to 1.1232 and given the close proximity of the 200-day ma at 1.1245 we will market this our downside target. The outlook remains negative while capped by the current October highs and early August high at 1.1858/1.1910. Additional support is offered by the mid-June high at 1.1296 and the more important 1.1110 end of May low. “