EUR/USD surrenders gains as risk appetite strengthens

Asian stocks rallied for a second day, putting an end to carry unwind and thus pushing the EUR/USD pair into negative territory.

Rejected at 1.1183

Common currency turned lower from 1.1183, tracking the flight to risk assets on account of the sharp rise in oil prices and fresh stimulus hopes. The EUR was offered in the NY session after ECB’s Draghi reiterated readiness to do more.

Ahead in the day, the currency pair could be influenced by German Zew survey figure and the equity market sentiment.

EUR/USD Technical Levels

The spot currently trades moderately weaker on the day around 1.1150. The immediate support is seen at 1.1128 (previous day’s low), which if taken out shall open doors for a drop to 1.1088 (50% of Mar low-Aug high). On the other hand, a break above immediate hurdle at 1.1221 (hourly 200-MA) could see the spot test offers at 1.252 (hourly 100-MA).

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Research Team at Goldman Sachs, suggests that while the temporary rebound in oil prices has seen EM FX rebound as well, they continue to expect high volatility in the oil market until 2016H2.
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