EUR/USD advances further to 1.1770 on notable USD supply

• DXY selling extends.
• Eurozone economic optimism offset political woes
• Focus shifts to the US durable goods and Fed minutes.

The EUR/USD pair extends its vertical rise from 1.1735 and now looks to regain 1.18 handle, as the broad-based US dollar sell-off gathers steam in Europe.

EUR/USD fast approaching 100-DMA at 1.1799

The spot reverses more-than-half the sell-off triggered after the weekend’s failed German coalition talks, as markets prefer to hold the common currency amid expectations of stronger Eurozone economic growth outlook.

Moreover, persistent weakness seen behind the US dollar across its main peers amid flatting US Treasury yield curve, in the wake of Yellen’s cautious remarks, also collaborates to the latest leg higher in the major.

Meanwhile, the Euro extends the upside against its American counterpart, as a few option expiries remain in play at 1.1750 levels. Markets now await fresh updates on the German political environment and US macro news for further momentum, while the FOMC minutes will also have a major impact on the prices.

EUR/USD Technical Levels

Karen Jones, Analyst at Commerzbank, explained: “EUR/USD is easing back slowly very near term but while above the 20-day ma at 1.1681 we will continue to assume a near-term upside bias. The correction higher remains in force for now and is capable of testing the recent high at 1.1880 and the 61.8% retracement at 1.1886. Above the 1.1858/1.1910 area (early August and October highs) lies the 1.2092 September high. Should failure at 1.1880/86 be seen then we should see the market retest the 200-day ma at 1.1327. A slide back and close below the 20-day ma at 1.1685.”