- EUR/USD attempts some consolidation in the mid-1.10s.
- The 21-day SMA at 1.1067 caps the upside so far.
- The cautious mood is expected to rise ahead of ECB.
The improved mood in the riskier assets on the back of mitigated trade concerns has lifted global yields, and it has particularly motivated yields of the German 10-year benchmark to bounce off recent historic lows and lend extra support to the European currency, all helping EUR/USD to sustain the breakput of the key 1.10 the figure.
In the meantime, and also collaborating with the positive tone in spot, the sentiment around the Greenback remains subdued (despite rising US yields and the higher USD/JPY) as market participants seem to expect a much dovish Fed at next week’s meeting and in the upcoming months.
Furthermore, EUR also looks underpinned by the probability that the ECB could disappoint market expectations on Thursday, as a dovish tone is already priced in as well as a good dose of looser monetary measures.
On the technical view, recent tops in the 1.1080 region (September 5th) are unlikely to come into focus in the very near term amidst the expected consolidation in the hours prior to the ECB event. Further north emerges the short-term resistance line at 1.1123. A surpass of this hurdle should open the door for a visit to the 1.1160 region, where coincide the 55-day SMA and late August peaks. Above this band, the selling pressure is forecasted to subside somewhat.