EURUSD price retreats from a two-week high touched earlier this Wednesday.The emergence of some USD buying is seen as a key factor exerting pressure.
Some repositioning ahead of the ECB on Thursday is a contributing factor to the pullback.
EURUSD price sees an intraday turnaround from the 1.0275 area, or a two-week high touched earlier this Wednesday and for now, seems to have snapped a three-day winning streak. The pair extends its descent through the early North American session and drops to the 1.0175-1.0170 area, or a fresh daily low in the last hour.
Renewed USD buying prompts some selling.The US dollar makes a solid comeback and recovers a part of this week’s heavy losses to its lowest level since July 6, which, in turn, prompts some selling around the EURUSD pair. Investors still seem convinced that the recent surge in US consumer inflation to a four-decade high would force the Fed to deliver a larger rate hike later this year. Adding to this, a slight deterioration in risk sentiment – as depicted by a modest fall in the equity markets – assists the safe-haven USD to stall its recent pullback from a two-decade high.
Focus remains on ECB decision
The ECB monetary policy decision on Thursday will play a key role in driving the near-term sentiment surrounding the common currency and providing a fresh directional impetus to the EUR/USD pair. Heading into the key event risk, traders might refrain from placing aggressive bets and prefer to wait on the sidelines. This could further help limit any meaningful downfall for the EUR/USD pair, warranting some caution before positioning for any further depreciating move.
EURUSD price technical outlook
EURUSD price stalled its recent corrective bounce from the lowest level since December 2002 near a resistance marked by the top boundary of a short-term descending channel extending from late May. The mentioned barrier, around the 1.0275-1.0280 region, is closely followed by the 1.0300 round-figure mark, which if cleared will be seen as a fresh trigger for bulls. The pair might then accelerate the momentum and aim to reclaim the 1.0400 round figure.
On the flip side, any subsequent downfall is likely to find some support near the 1.0150 area. Some follow-through selling will negate any near-term positive bias and make the pair vulnerable to breaking below the 1.0100 mark. The subsequent downfall will expose the parity market and the YTD low, around the 0.9950 region.
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EUR/USD continues to trade above 1.0200 in the American session on Wednesday. The data from the US showed that Existing Home Sales fell sharply in June and didn’t allow the dollar to gather strength. Meanwhile, investors stay on the sidelines while waiting for the ECB meeting.
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