EUR/USD: Slight retrace higher but for how long?
It is a familiar start to the week for EUR/USD as the pair retraces losses to start the day and moves higher. Despite help by the Fed to address dollar funding issues, the greenback continues to be largely bid across the board since last week.
The flows could be self-reinforcing and in turn keep the dollar underpinned amid the continues ongoing crisis and panic in the market.
For EUR/USD, it is but a familiar tale as the greenback retraces gains initially and is likely to keep strengthening once we look towards the latter stages of the day.
At least for now, the gains are rather mild as the paid bounces off lows of 1.0636 to near session highs at 1.0735. Among the key upside levels to watch is the 1.0800 level with the Friday high at 1.0830 a key near-term level.
Beyond that, the 100-hour moving average at 1.0865 will also act as a next line of defense for sellers in keeping the near-term bearish bias.
As for a downside move, watch out for a firm break under 1.0650 in the sessions ahead. That will lead to the next trending move lower if sellers can manage that.