EUR/USD turns positive near 1.1160

The now softer tone around the buck is helping EUR/USD to extend the bounce off recent lows and regain the 1.1150/60 band.

EUR/USD decline halted near 1.1140

The pair is recovering part of the ground lost following Thursday’s sharp pullback to the area of 1.1130, where some decent support seems to have emerged for the time being.

The greenback reacted positively to the more-hawkish-than-expected message from the FOMC meeting on Wednesday, prompting sellers to quickly step in and force the pair to recede to recent 2-week lows.

The bearish note around spot got more colour following the breakdown of the key near-term support line (now resistance), today at 1.1172, which was sustaining the constructive outlook in previous sessions.

On the data front, EMU’s final inflation figures for the month of May are unlikely to grab any attention, expected to meet the preliminary readings. Across the pond, housing starts and building permits are due along with the speech by Dallas Fed R.Kaplan (voter, hawkish) and the advanced gauge of the Reuters/Michigan index for the month of June.

EUR/USD levels to watch

At the moment, the pair is advancing 0.08% at 1.1155 facing the next resistance at 1.1213 (20-day sma) seconded by 1.1296 (2017 high Jun.14) and finally 1.1300 (high Nov.9). On the other hand, a break below 1.1130 (low Jun.15) would target 1.1108 (low May 30) en route to 1.1073 (76.4% Fibo of 1.1300-1.0339).

It is worth noting that the recent bearish divergence in the daily RSI seems to have played its part, with the USD-dynamics now returning to the fore as the main drivers of the price action.