EUR/USD: Bounce Limited, Downward Risk Prevails

EUR/USD: Bounce Limited, Downward Risk Prevails

18 May 2016, 14:54
Roberto Jacobs
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EUR/USD: Bounce Limited, Downward Risk Prevails


EUR/USD Current Price: 1.1283

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The dollar traded broadly higher across the board during the Asian session, fueled by hopes that upcoming FOMC's Minutes will shed some light over the upcoming US rate hike, and whether if June remains on the table. The EUR/USD pair broke below 1.1280, but extended its decline down to 1.1255, following the release of EU inflation for April, which fell by 0.2% on a year-to-year basis, meeting expectations. Monthly basis, it remained flat, at 0.0% with the core figure also flat from previous 1.5%.  The greenback, however, eased ahead of US opening, as the Pound soared on new Brexit polls, dragging most major currencies along. 

The EUR/USD pair 1 hour chart, maintains a negative tone, and this ongoing recovery seems just corrective, giving that it stalled in the 1.1280/90 region and below a bearish 20 SMA, whilst the technical indicators are turning back south after correcting oversold readings. In the 4 hours chart, technical readings also favor the downside, but with limited downward momentum, as the price is below a bearish 20 SMA, whilst the technical indicators hold directionless within bearish territory.

Support levels: 1.1245 1.1200 1.1160

Resistance levels: 1.1280 1.1330 1.1370


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