On Thursday, the EUR/USD pair swung from a session highs near 1.1455 region and touched a one-week low level of 1.1370 before finally settling lower for the second consecutive session, around the 1.1400 handle. The corrective slide, however, turned out to be short lived as the shared currency remained supported by anticipation of ECB tapering.
According to a story published in the WSJ, the ECB President Mario Draghi is scheduled to give a speech at the Federal Reserve’s Jackson Hole conference in August for the first time in three years and could express the central bank’s confidence in the Euro-zone economy, thus reduce its dependence on monetary accommodation. According to the people familiar with the matter, Draghi might also signal towards gradual unwinding of its QE program as early as at Sept. 7 meeting and helped the pair to bounce off lows.
The pair extended its consolidative price action around the 1.1400 handle through Asian trading session on Friday as investors await a due of important US macro data – monthly retail sales and the latest inflation figures before positioning for the next leg of directional move.
Technically, the pair remains poised to extend its near-term bullish trajectory and the same would be further reinforced on a sustained move back 1.1430-40 immediate resistance zone. A clear break through the mentioned resistance should continue lifting the pair towards 1.1465 intermediate horizontal resistance ahead of 1.1480 level (61.8% Fibonacci expansion level of 1.1172-1.14456 up-move and subsequent retracement) and the key 1.1500 psychological mark.
On the flip side, a decisive break below 1.1375-70 area could trigger a corrective slide initially towards 1.1340-35 region ahead of the 1.1300 round figure mark. Any subsequent weakness now seems to find fresh buying interest near 1.1275 area, which if broken could pave way for extension of the pair’s near-term corrective slide.