EUR/USD: Upside stalls at 1.0875 on IFO

The bulls appear to have taken a breather after the Asian upsurge, allowing a brief phase of consolidation in EUR/USD near the highest levels since Dec 2016. The spot stalls its bullish run as the USD buyers lurk amid bargain hunting, after the greenback slumped to the lowest levels since Nov last year against its major rivals.

The US dollar fell sharply across the board on the back of Donald Trump's defeat over the health-care replacement plan dented investors' appetite in the ‘reflation' trading theme. 

In the day ahead, the major is likely to regain poise and resume upmove towards 1.09 handle, as negative European equities and weaker treasury yields continue to underpin the funding currency EUR.  Moreover, upbeat German IFO surveys for March also provide fresh support to the common currency. German March IFO: Upbeat across all indicators

Markets also digest the news of the German Chancellor Angela Merkel winning the Saarland regional vote, her biggest victory in thirteen years. Meanwhile, focus now remains on the FOMC member Evans speech due later in the NA session, in absence of economic events from the US docket.

EUR/USD Technical Levels   

Karen Jones, Analyst at Commerzbank explains, “EUR/USD’s near term outlook is neutral to positive: The cross is the key band of resistance offered by the 1.0829 February high, the 1.0851 October low, 1.0875 December high and 1.0882 200 day moving average. In this area it may stall, however upside risks are growing. The market is immediately bid above 1.0760 – the low from the 24th March and dips should find support between the 1.0679 mid-February high and the 55 day moving average at 1.0664.”