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EURUSD near-term bearish

With investors looking past the latest political turmoil in Spain, the EUR/USD pair was seen building on overnight tepid recovery move from 7-week lows. A modest US Dollar retracement, primarily led by some profit taking amid absent top tier economic releases, helped the pair to gain some positive traction. However, growing market expectations that the Fed would deliver a third rate hike in December, coupled with hopes for US tax reform continued supporting the greenback and might keep a lid on any sharp near-term up-move. 

Investors now look forward to the ADP report on the US private sector employment, which is considered as a precursor for Friday's official jobs report and should provide some fresh impetus. Later during the day, key speeches by the ECB President Mario Draghi and the Fed Chair Janet Yellen might trigger a fresh bout of volatility ahead of this week's key event risk - NFP. 

From a technical perspective, the pair has already confirmed a bearish break below 50-day SMA and with short-term indicators holding in negative territory, the pair remains poised to extend its near-term corrective slide. Hence, any additional recovery move now seems to confront fresh supply near the 1.1800 handle and even if the pair managed to clear this immediate hurdle, further up-move should remain capped at 50-day SMA, support break now turned resistance, near the 1.1845 region.

On the flip side, 1.1725 level is likely to protect immediate downside, which if broken would reinforce the bearish bias and should drag the pair below the 1.1700 handle towards testing its immediate strong support near 1.1680-75 zone, marking 23.6% Fibonacci retracement level of 1.0341-1.2092 YTD up-swing. A follow through selling pressure is likely to open room for additional downslide initially towards the 1.1600 mark and eventually towards 1.1555-50 horizontal support.

Source: fxstreet.com

With investors looking past the latest political turmoil in Spain, the EUR/USD pair was seen building on overnight tepid recovery move from 7-week lows. A modest US Dollar retracement, primarily led by some profit taking amid absent top tier economic releases, helped the pair to gain some positive traction. However, growing market expectations that the Fed would deliver a third rate hike in December, coupled with hopes for US tax reform continued supporting the greenback and might keep a lid on any sharp near-term up-move. 

Investors now look forward to the ADP report on the US private sector employment, which is considered as a precursor for Friday's official jobs report and should provide some fresh impetus. Later during the day, key speeches by the ECB President Mario Draghi and the Fed Chair Janet Yellen might trigger a fresh bout of volatility ahead of this week's key event risk - NFP. 

From a technical perspective, the pair has already confirmed a bearish break below 50-day SMA and with short-term indicators holding in negative territory, the pair remains poised to extend its near-term corrective slide. Hence, any additional recovery move now seems to confront fresh supply near the 1.1800 handle and even if the pair managed to clear this immediate hurdle, further up-move should remain capped at 50-day SMA, support break now turned resistance, near the 1.1845 region.

On the flip side, 1.1725 level is likely to protect immediate downside, which if broken would reinforce the bearish bias and should drag the pair below the 1.1700 handle towards testing its immediate strong support near 1.1680-75 zone, marking 23.6% Fibonacci retracement level of 1.0341-1.2092 YTD up-swing. A follow through selling pressure is likely to open room for additional downslide initially towards the 1.1600 mark and eventually towards 1.1555-50 horizontal support.

Source: fxstreet.com

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