EUR/USD unable to move away from the 1.0650 area

EUR/USD printed a fresh daily low during the American session at 1.0651. The pair remains near the lows, consolidating modest losses. 

It has been a quiet day so far in the forex market. The US dollar bounced modestly to the upside after Friday’s decline. Among the best performer was the pound that pushed EUR/GBP toward 0.8700. The greenback was supported by rising US yields ahead of Wednesday’s FOMC decision and Yellen’s press conference. 

Earlier today EUR/USD reached at 1.0714, the strongest level since February 8. Then lost momentum amid a recovery of the USD and fell 55 pips from the highs. 

Technical outlook 

Valeria Bednarik, Chief Analysts at FXStreet, point out that today no critical level has been broken. “Around 1.0710, the pair has the 38.2% retracement of the post-US election slide, and investors have been unwilling to push the price beyond it ever since early February, amid political uncertainty at both shores of the Atlantic”. 

She explained that the 4-hour chart shows indicators easing from extreme overbought readings achieved at the beginning of the day, “but also that the 20 SMA maintains a strong bullish slope after breaking above the 100 SMA, this last indicating a limited downward scope.” According to her, a downward corrective movement towards the 1.0630 region seems likely, “while a break below this last should favor a deeper downward corrective move.”