EUR/USD recovery gains traction, set to test 5-DMA

The EUR/USD pair finally breaks its consolidation phase to the upside and prints fresh daily tops, as the USD buying stalls across the board.

EUR/USD eyes 5-DMA at 1.1230

Currently, EUR/USD regains bids and trades modestly flat at fresh session highs of 1.1223, having finally surpassed key 10-DMA (1.1221) resistance. Having bottomed out just ahead of 1.1200 levels in the US last session, the main currency pair takes on a gradual recovery mode, with the overnight recovery now gaining traction as the US dollar wipes-out gains against major peers, after the greenback paused its rally against the Japanese yen.

The Japanese currency remains the main driver behind today’s price-action across the fx board amid reports that the BOJ may deepen rate cuts further into the negative territory at its monetary policy review meeting scheduled next week.

Looking ahead, the major is likely to get influenced by the USD moves as well as by RO-RO trends persisting in the markets, with the only Eurozone industrial production data to fill in a data-light EUR calendar.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.1300 (round number). A break beyond the last, doors will open for a test of 1.1343 (Aug 28 high). On the flip side, the immediate support is placed at 1.1200 (round figure) below which 1.1175 (200 & 100-DMA) could be tested.