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EUR/USD: Extending the up move

EUR/USD keeps the bid tone in the 1.1270/80 band. The 21-day SMA at 1.1285 challenges bulls’ aspirations Trade, ECB easing, Fed’s rate cut seen ruling the sentiment.
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FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market and was founded in 2000. The website offers a wide range of tools and resources: 24/5 currency news, real-time economic calendar, advanced rates and charts, educational webinars, analysis reports, forecasts, Learning Center, newsletters, industry services, FX customizable studies… As its distinctive trademark, the portal has always been proud of its unyielding compromise to provide neutral and unbiased information and to enable its users to take better and more confident decisions. FXStreet has managed to gain the collaboration of the entire Forex industry, from individual professionals and small companies right up to Forex Brokers and Investment Banks. FXStreet covers the FX Market 24/5: an expert team of journalists, traders and economists picture what the market is doing and what is happening as it happens. Besides the main website in English, the portal is available in 16 other languages (English, Japanese, Simplified Chinese, Traditional Chinese, Spanish, Russian, Arabic, Turkish, Indonesian, Portuguese, German, French, Italian, Hungarian and Vietnamese, Korean and Catalan). FXStreet was short listed as “Best e-FX initiative of the year (vendor)” for the FX Week e-FX Awards 2010.
  • EUR/USD keeps the bid tone in the 1.1270/80 band.
  • The 21-day SMA at 1.1285 challenges bulls’ aspirations
  • Trade, ECB easing, Fed’s rate cut seen ruling the sentiment.

EUR/USD is extending the up move for yet another session on Monday, although the 1.1280/85 band has emerged as a tough nut to crack for the time being. This area is coincident with the key 21-day SMA (1.1285).

Spot has gained ground almost exclusively on the back of USD-dynamics, namely rising speculations of a rate cut by the Federal Reserve as early as at this month’s meeting. The size of such a rate cut, however, still remains unclear for market participants.

However, EUR faces issues in its own backyard and not only stemming from the unremitting slowdown in the region, but also from the increasing probability that the ECB could cut rates in the near term along with a potential restart of the ‘quantitative easing’ (QE) and a probably change in the bank’s forward guidance.

In the meantime, developments from the US-China trade front and their impact on the broad risk appetite trends are expected to drive the sentiment in the near/medium term. In this regard, the US earnings season kicking in this week is seen collaborating with the mood as well. Data wise today, the greenback will be looking at the publication of the NY Empire State index.

Technically speaking, the 1.1181/76 band appears underpinning EUR/USD and is expected to hold the downside in the near term. On the way up, spot ideally needs to surpass the critical 200-day SMA at 1.1323 in order to alleviate downside pressure and allow for a new visit of monthly lows in the 1.1415/20 band.

Equities Contributor: FXStreet

Source: Equities News