EUR/USD shrugs-off ECB’s Hansson, re-takes 1.1750

Having found strong bids near 1.1720 region on several occasions, the EUR/USD pair attempted a tepid bounce back above 1.1750 levels, as the bulls defy the calls for lower interest rates by the ECB.

EUR/USD: Will the recovery last?

The main currency pair is on a solid recovery mode, mainly driven by large option expiries in play, and hence, the EUR bulls remained unperturbed by the dovish remarks from the ECB Governing Council member Hansson and Moody’s latest report.

ECB’s Hansson: Rates to remain low at least while QE is continuing

Moody's expects ECB to keep interest rates low over next 12 to 18 months

Meanwhile, fresh selling seen in the US dollar across the board also aids the bounce in EUR/USD from near monthly lows of 1.1717. The USD index ran into the 93.50 resistance (5-week tops) and from there extended its retreat, now printing daily lows of 93.23.

Markets are resorting to profit-taking on their USD longs, as the speeches from the global central bankers are expected spur huge volatility across the fx space. Also, Trump reflation trades take a breather, as focus shifts to the fundamentals, with the German prelim CPI and US final GDP slated for release later on Thursday.

EUR/USD Technical Set-up  

Karen Jones, Analyst at Commerzbank, explained: “EUR/USD’s outlook is negative following the erosion of the 5 month uptrend and the 1.1836/23 September lows and we look for further weakness to initially to the 1.1662 August low and then the mid-June high at 1.1296 and the more important 1.1110 end of May low. Intraday rallies should fail ahead of 1.1820 and remain capped by 1.1908, the 20 day ma.”