EUR/USD Aiming for 1.1700, Again

EUR/USD has rallied near 1.1630 on Thursday, supported by firm messaging from European Central Bank officials and a moderate rebound in risk sentiment following the resolution of the U.S. government shutdown earlier this week. The pair briefly tested 1.1643, its highest level in two weeks, before easing slightly in midday trade.

Comments from ECB Executive Board member Isabel Schnabel helped underpin the Euro after she said inflation risks in the Eurozone remain “tilted a little to the upside,” suggesting policymakers are in no rush to discuss rate cuts. That hawkish tone reinforced expectations that the ECB will stay on hold through the end of the year. In the U.S., uncertainty persists following the short federal shutdown that delayed the release of key inflation and employment data.

EUR/USD price history

In the above chart, EUR/USD rates have broken the downtrend from the September and October swing highs, suggesting the recent period of weakness may be ending. The pair is on pace for its first close above its 50-day exponential moving average (EMA) since October 16. From a technician’s perspective, a breach of recent swing highs near 1.1669 would confirm that the series of lower highs and lower lows has ended. Until then, resistance could appear at first blush in the area around the late-September swing lows/late-October swing highs.

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