EUR/USD: Bearish consolidation to extend ahead of ECB minutes?

The EUR/USD pair extended its overnight downside consolidation mode into Asia, although manages to hold above the midpoint of 1.17 handle, as the bears take a breather ahead of the release of the ECB monetary policy meeting minutes.

EUR/USD: Downside opening up towards 1.1730/20

The spot remains better offered so far this session, in response to renewed buying seen in the US dollar versus its major rivals, as the Asian traders reacted positively to a solid US ISM services PMI and ADP jobs data. The USD index is seen flirting with daily tops of 93.40, having found some good support near 93.25 region.

On Wednesday, US service sector growth hit its fastest in 12 years in September and private employers added more jobs than forecast, despite Hurricane Harvey and Irma. Upbeat US macro news added to the signs of strength seen in the US economy lately, in turn boosting the Fed rate hike expectations.

However, further gains appears restricted in the buck amid subdued Treasury yields, as they extend their retreat from three-month tops. Moreover, no comments made by the Fed Chair Yellen overnight on the monetary policy or economy also weighed down on the US rates.

Meanwhile, the Euro also remains under pressure on the back of sluggish Eurozone services PMI and retail sales data, which casts doubts over the ECB’s tapering plans. Later today, all eyes will be glued to the minutes release of ECB’s Sept policy meeting, which could throw fresh light on the tapering plans and also on the discussion over the Euro appreciation.

The major also looks forward to a fresh batch of US economic releases, including the jobless claims, trade balance and factory orders, for fresh impetus, while the speeches by FOMC members Powell and Harker will also hog the limelight later on Thursday.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet noted: “The key support remains to be 1.1720, where it bottomed last week, with scope then to extend its decline down to 1.1661, August low, on a break below it. To the upside, selling interest is aligned around 1.1820/30, and seems unlikely the pair could break above the level during the upcoming sessions and ahead of the mentioned US employment report. Support levels: 1.1720 1.1690 1.1660 Resistance levels: 1.1770 1.1825 1.1860.”