EUR/USD looks to regain 1.1650 as USD recovery falters

• USD recovery loses steam.
• Little impressed by Euro area final manufacturing PMIs.
• Eyes on US tax reform bill, Fed Chair announcement.

The EUR/USD pair is seen making minor recovery attempts over the last hour, following a sharp downward spike to near 1.1625 levels.

EUR/USD finds buyers near 1.1625

The stalled recovery in the US dollar across its main counterpart lends some support to the renewed uptick seen in the EUR/USD pair, with the bulls now looking to regain 1.1650 levels ahead of the BOE interest rate decision.   

The spot could experience some volatility on the BOE policy announcement, which could have a major impact on the EUR/GBP cross, eventually impacting the Euro. Markets are widely expected the BOE to hike rates, although the central bank’s outlook on the future policy path will hold the key for the markets.

The pair remained unimpressed by mixed Eurozone PMI readings, however, it could get influenced by the US politics in the day ahead, as the House of Republicans remain on track to unveil the tax reform bill, while Trump is expected to announce the next Fed Chair later in the NA session.

EUR/USD Technical Levels

Karen Jones, Analyst at Commerzbank noted: “EUR/USD’s outlook stays negative, the market last week closed below 1.1662 the 17th August low and is struggling very near term to regain this resistance. It has recently completed a head and shoulders top pattern 1.2092-1.1662, targeting 1.1232. Given the close proximity of the 200-day ma at 1.1263, we will make this our downside target.”

“The outlook remains negative while capped by the current October highs and early August high at 1.1858/1.1910, intraday rallies are indicated to terminate circa 1.1680/1.1715. Additional support is offered by the mid-June high at 1.1296 and the more important 1.1110 end of May low,” Karen added.