EUR/USD eyeing a test of 3-week lows near 1.1120?

The EUR/USD pair extends its Asian side-trend into early Europe, as investors await fresh fundamental catalysts for next near-term direction.

EUR/USD: A light session ahead

The spot is seen trading in tight ranges, moving back and forth in a 10-pips narrow range so far this Wednesday, as the greenback continues to consolidate the renewed upside against its main competitors, inspired by hawkish comments from the FOMC member Rosengren. 

The spot manages to hold the support of three-week troughs reached at 1.1119 a day before, as oil weakness led risk-off market profile somewhat underpin the funding currency Euro. However, further recovery looks limited, as the US yields have picked-up strength across the time horizon, offering fresh impetus to the USD bulls.

Moreover, in absence of fresh economic drivers from the Euroland, the EUR/USD pair will continue to track the price-action surrounding the greenback and Treasury yields, ahead of the only US macro data, the existing home sales, slated for release in the NA session.

EUR/USD Technical Levels

Karen Jones, Analyst at Commerzbank noted: “EUR/USD outlook is negative: The Euro has failed at the 20 day ma and has eroded the base of the channel at 1.1140. Rallies are struggling to overcome the 20 day ma at 1.1203 and we look for failure here. This should be enough to trigger losses to the 1.1070/23.6% retracement of the move higher this year and then the 55 day ma at 1.0995. The Elliott wave count on the daily is suggesting that we allow for losses to extend to the 1.0930/38.2% retracement.”