Published: 2/19/2018 3:47:00 AM
• A modest USD uptick prompts some fresh selling.
• Downside remains cushioned amid holiday-thinned trade.
• This week’s important releases would set the near-term tone.
The EUR/USD pair quickly reversed an early European session dip to sub-1.2400 level and rebounded around 25-30 pips from session lows, albeit struggled to build on the rebound.
The pair extended its Asian session retracement slide from 1.2435 level and slipped to an intraday low level of 1.2388 amid a modest pickup in the US Dollar demand, which is now beginning to attract some buyers at lower levels on the back of rising prospects for possibly four Fed rate hike moves in 2018.
Investors, however, seemed reluctant to place any aggressive bets and preferred to wait on the sidelines ahead of this week's key event risks - the release of the FOMC and ECB monetary policy meeting minutes on Wednesday and Thursday respectively.
From a technical perspective, the pair's repeated failures to build on/sustain above the key 1.2500 psychological mark now seems to suggest that a possible near-term might already be in place. Hence, a follow-through weakness, led by some fresh technical selling, now looks a distinct possibility.
Technical levels to watch
On a sustained weakness below the 1.2400 handle, the pair is likely to accelerate the slide towards 1.2370 intermediate support before eventually dropping to 1.2335 zone and the 1.2300 handle. Meanwhile, on the upside, any meaningful bounce might now confront fresh supply near mid-1.2400s, above which bulls might make a fresh attempt towards conquering the 1.2500 handle.
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