EUR/USD: Recovery capped below 1.0600 ahead of German data

The renewed uptick in EUR/USD from daily lows lost legs just shy of 1.06 handle, with the spot now erasing gains to trade around 5-DMA at 1.0583.

The bulls are losing the recovery momentum, as the greenback reverses losses and looks to regain the bids against its major rivals. The USD index bounces-off lows at 101.56 and trades at 101.66 levels. The US dollar is expected to regain poise in the day ahead, in wake of rising March Fed rate hike bets

However, sentiment around the EUR/USD pair remains underpinned somewhat, as the funding currency Euro finds support from persisting risk-off tone in the markets, fuelled by ongoing geo-political tensions surrounding North Korean missiles launch a day before.

Calendar-wise, the immediate focus remains on the German factory orders data, while Eurozone revised GDP data will also garner some attention in the European session. Besides, the major may also take cues from the European bond yields in wake of development surrounding the French elections.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet noted, “The pair trades uneventfully above the 1.0565 Fibonacci support. The 4 hours chart shows that technical indicators have lost their upward strength and turned south within positive territory, but are still above previous daily lows, whilst the price is moving back and forth around a bearish 100 SMA, and above a slightly bullish 20 SMA, indicating limited directional strength.”

The key support is the 1.0520 region, as renewed selling interest below the level could see the pair extending its slide towards 1.0340, this year low, while the upside remains well-limited as long as the price remains below the 1.0700/20 price zone, ”Valeria added.