EUR/USD Recovers Sharply to 1.1350 from Sub-1.1300 Level

EUR/USD Recovers Sharply to 1.1350 from Sub-1.1300 Level

17 May 2016, 16:02
Roberto Jacobs

EUR/USD Recovers Sharply to 1.1350 from Sub-1.1300 Level

As the US trading session gets underway, fresh bids just below 1.1300 handle boosted the EUR/USD pair to the vicinity of 1.1350 level.

The pair initially dropped below 1.1300 level on slightly upbeat US CPI and mixed housing market data but managed to recover sharply despite of better-than-expected US industrial production and capacity utilization rate for the month of April.

With the US CPI release out of the way, investors now shift focus back to the looming deflationary concerns in the Euro-zone that would be reflected from the final Euro-zone CPI reading slated for release on Wednesday.

From technical perspective, the pair has maintained its Friday's range and has held an important support confluence near 1.1300 round figure mark. Only a decisive break through this important support would now open room for further depreciating move for the pair.

Technical levels to watch

On a sustained break below 1.1300 level, the pair would turn vulnerable to extend its decline, initially towards April lows support near 1.1220-15 area and eventually towards 100-day SMA support near 1.1150 region.

Alternatively, bounce from the 1.1300 important confluence region and a follow through strength beyond 1.1345-50 region might assist the pair further towards testing an important support break-point turned immediate strong resistance near 1.1365-70 region (20-day SMA).


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