EUR/USD corrects from 6-month tops, back below 1.1150

Having peaked at fresh half-yearly highs of 1.1172 in Asia, the EUR/USD pair is on a retreat heading into early European trading.

EUR/USD eyes US data for fresh impetus

The EUR/USD pair brought an end to its ongoing winning streak and fell into losses on Thursday, as the greenback turned positive for the first time in five days, in the wake of the Trump controversy. The USD index bounces-off multi-month lows of 97.28 and regains 97.50 levels.

The retreat in the spot is also partly driven by a relief-rally seen in the US yields after the recent in treasury yields, fuelled by increased political uncertainty in the US, which weighed down on the Fed rate hike expectations. According to the CME FedWatch took, odds of a June Fed rate hike now stands at 64% versus 90% probability seen a week ago.  ,

In the day ahead, the corrective slide in the EUR/USD pair could extend, as markets resort to profit-taking on their USD shorts, in response to an extension of the Trump trade unwinding Meanwhile, amid a lack of fundamentals from the Euroland, investors will closely track the USD dynamics, while still digesting the developments surrounding alleged Trump-Russia ties.

EUR/USD Technical Levels

Jim Langlands at FXCharts.com notes: “Note that the 4 hour momentum indicators are at overbought extremes, so some consolidation/correction would seem probable although the longer term uptrend seems firmly intact, which would remain the case as long as we hold above 1.0900, but which looks pretty safe today. On the downside, the minor support will be seen at around 1.1120, and buying dips would currently seem to be the plan, with a SL on any new long positions placed below 1.1080.”