EUR/USD is hovering around 1.1400, marginally lower. It is falling for the second day in a row as it continues to correct lower from 1-year highs that reached on Wednesday during the Asian session at 1.1489.
EUR/USD keeps the bullish stance – Scotiabank
The current corrective tone lost strength after a media report mentioned that the European Central Bank could announce a guideline for a QE tapering at the September meeting. That helped stabilize the euro against the pound and pushed it to the upside versus the Swiss franc.
The US dollar is posting mix results in the market, with the DXY uncharged around 95.50. Janet Yellen is giving testimony to Congress for the second day in a row. So far, she has not surprised markets. US economic data released today included the June PPI (annual rate came in at 2.0%, slightly above the 1.9% expected) and initial jobless claims (-3K to 247K during the week ended July 7).
Fed's Yellen speech: Fiscal policy uncertainty is currently quite high
Levels to watch
Earlier today the pair traded in positive territory but it was capped by the 1.1445/50 area and pulled back. It bottomed at 1.1370, the lowest level in a week and rebounded. The recent recovery remains limited by the 20-hour moving average that stands at 1.1419. A consolidation on top of 1.1420 would open the doors to more gains and a probable test of daily highs, at 1.1457. Above that level, the next area to watch is 2017 highs, before 1.1500.
A failure to rise above 1.1420 would keep the pair with bearish momentum and the corrective impulse intact. A confirmation under 1.1380, could create signals of a continuation to the downside. Support levels could be seen at 1.1355 (Jul 3 low) and 1.1310 (Jul 5 low).