Bulls maintain pressure on 1.1200

EUR/USD Current Price: 1.1195

• Wall Street’s positive tone drives the US dollar lower against the euro.
• Interest rate speculation prices another 50 basis point cut by the Federal Reserve in November.
• EUR/USD aims to conquer the 1.1200 mark, but nothing is set and done yet.

EUR/USD retreated from an intraday high of 1.1198 hit earlier in the day, but is holding close ahead of the Wall Street open. The US dollar found some near-term demand early Wednesday, moving up flat on FX. For a change, the euro is among the USD’s most resilient rivals.

Financial markets pulled away from the USD on Tuesday after disappointing data from the United States (US) fueled speculation the Federal Reserve (Fed) will cut interest rates by 50 basis points (bps) when it meets in November , versus post-Fed speculation for a 25 bps trim.

As a result, US indices ended the day in the green, although overseas rivals could not benefit from the positive momentum. Asian and European indices are trading mixed, not far from their opening levels. However, US futures are looking north, supporting another positive day and further losses in the USD.

From a data point of view, the macroeconomic calendar has little to offer. The European Central Bank (ECB) had a typically uneventful non-monetary policy meeting. As for the US, the country posted MBA Mortgage Applications for the week ended September 20, which rose 11%. August new home sales will be released later in the day.

EUR/USD short-term technical outlook

Technically, the EUR/USD pair is poised to extend its lead, although the fight around 1.1200 is yet to be defined. The pair is for the second consecutive day trading close to the mentioned figure. On the daily chart, EUR/USD made a higher high and a higher low, while the 20 simple moving average (SMA) rose marginally in the 1.1090 price area. At the same time, the 100 SMA is aiming firmly north, above a slightly bullish 200 SMA, both well below current levels. Technical indicators, meanwhile, have returned to positive levels, lacking directional strength but reflecting the absence of selling interest.

In the short term, and according to the 4-hour chart, the risk is tilted to the upside. EUR/USD remains well above bullish moving averages, while technical indicators have moved north into positive levels. Positive momentum is limited, but there are still no technical signs of a potential downside. Short-term support can be found around 1.1170, where the pair has bottomed twice in recent sessions.

Support levels: 1.1165 1.1120 1.1090

Resistance levels: 1.1200 1.1250 1.1290