EUR/USD: Bulls take a breather, retreats from 1.1260 ahead of PMIs

EUR/USD extended its upbeat momentum into a third day on Thursday, although the bulls faced exhaustion just short of 2017 tops of 1.1268, now pushing the rate back below 1.1250 levels.

EUR/USD awaits EZ final PMIs, US ADP

The spot is seen reversing gains and now trades modestly flat amid a pick-up in buying interest behind the US yields across the horizon, thus, offering some respite to the USD bulls. The USD index struggles to extend the recovery from 96.80 levels and flirts with 97 handle.

The EUR/USD pair also came under selling pressure in Asia, as risk-on trades gathered steam amid higher oil and Asian equities, which undermines the sentiment around the funding currency Euro.

On Wednesday, the major rallied hard amid renewed political jitters arising out of the US, after the Reuters reported that the US President Trump could withdraw from Paris climate accord, while headlines citing Comey saying that Trump pressured him on Flynn investigation also weighed negatively on the buck.

Focus now shifts towards a flurry of final manufacturing PMI reports from the Euro area economies, while the US dataflow will have a significant impact on the main currency pair. The US docket offers ADP jobs report, followed by jobless claims and ISM manufacturing PMI data.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet noted: “From a technical point of view, the pair has recoup its bullish stance, with the price above a flat 20 SMA, in the 4 hours chart, but with the larger ones heading north far below it, and technical indicators losing upward strength, but holding near their daily highs. Overall, the pair looks poised to extend its advance, although it would take an advance beyond 1.1265 to confirm such extension towards 1.1300 and beyond. Support levels: 1.1200 1.1160 1.1120 Resistance levels: 1.1265 1.1300 1.1345.”