EUR/USD eases to 1.1230 amid positive equities, Draghi eyed

The renewed rally in the EUR/USD pair lost pace just shy of 1.1250 barrier, with the rate now drifting lower on the back of persistent risk-on market profile, as dust settles over the BOJ and Fed aftermath.

EUR/USD flirts with 20-DMA at 1.1201

Currently, EUR/USD trades +0.07% higher at 1.1198, bouncing-off lows struck at 1.1185 earlier on the day. The main currency pair pares gains as risk sentiment remains upbeat amid higher European equities and commodities’ prices, which weigh down on the demand for the borrowing currency EUR.

However, the retreat remains capped by ongoing weakness in the US dollar across the board, in light of Fed’s inaction and more gradual approach towards its interest rate trajectory. All eyes now remain on the ECB Draghi’s speech due ahead of the US existing home sales data later in the NA session.

Carol Harmer, Founder at charmertradingacademy.com, noted, “We would like to be buyers on any short term weakness down towards the 1.1165 to 1.1155 area where 2 trendlines  intersect on these short term charts...and also where the short term 61.8 Fib level is located.....We would not really be concerned over longs unless we started to dip below 1.1100.....Now the other way to play this if we do not get a pullback to buy a break of 1.1225....This seen we would see sellers run for cover and the buyers then coming back looking for further strength with the 1.1270/84 resistance calling...We should see profit taking around these levels”

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.1256 (Sept 16 high). A break beyond the last, doors will open for a test of 1.1286 (Sept 15 high). On the flip side, the immediate support is placed at 1.1200 (resistance-turned support) below which 1.1145 (static support) could be tested.