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Euro rebound runs into 1.1560 to 1.1565 technical resistance
Analysts warn EUR/USD could fade if markets keep dialing back Fed hike expectations, while a stronger US labor or inflation print could quickly push the dollar higher.
The euro has rebounded against the US dollar after falling to mid-June lows, but EUR/USD is now approaching a major technical resistance area, according to FXStreet.
The article links part of the currency move to markets scaling back expectations for additional Federal Reserve rate hikes after Fed Chairman Kevin Warsh reduced forward guidance, leaving policy more dependent on incoming data. FXStreet notes that the US dollar could regain strength quickly if US inflation and labor outcomes surprise to the upside.
FXStreet cites Commerzbank analyst Michael Pfister, who said the rally may reflect the market pricing out Fed hawkishness too early, pointing to the risk of a stronger-than-expected US labor report that could revive bets on further rate increases. FXStreet also quotes UOB Group analyst Quek Ser Leang, who argues EUR/USD’s bounce from the mid-June trough at 1.1324 looks like a reaction from oversold conditions, but buyers need to clear the 1.1560 to 1.1565 resistance band.
On levels, FXStreet highlights that a decisive break and hold above 1.1560 to 1.1565 could open the door toward the June peak near 1.1622. It also lists support near 1.1470, followed by 1.1445 at the lower boundary of the daily Ichimoku cloud.
Latest closeEUR/USD 1.152 ▼0.3%