EUR/USD off highs, returns to 1.1000

EUR/USD has faded the initial spike to fresh 2-day highs near 1.1020 and is now deflating to the 1.1000 neighbourhood.

EUR/USD firmer on USD-selling

Increasing downside pressure on the greenback via today’s slump in USD/JPY has allowed the pair to retake the 1.1000 key barrier, although the upside seems to have run out of steam near 1.1020 for the time being.

Spot remains on a firmer footing during the first half of the week as the USD-rally appears somewhat alleviated amidst increasing cautiousness ahead of tomorrow’s FOMC meeting. Recall that expectations of a rate hike are marginal at least until the December meeting, where the probability of a rate hike climbs to nearly 40%, according to CME Group’s FedWatch tool

EUR/USD levels to watch

The pair is now gaining 0.11% at 1.1007 facing the initial hurdle at 1.1057 (20-day sma) followed by 1.1075 (200-day sma) and then 1.1166 (high Jul.14). On the flip side, a breakdown of 1.0913 (post-Brexit low Jun.24) would open the door to 1.0820 (low Mar.10) and finally 1.0777 (low Jan.21).