EUR/USD consolidates the Asian recovery ahead of FOMC week

The recovery in the EUR/USD pair from near 2016 lows lost legs just shy of 1.0570, with the bulls now struggling hard to retain the bids as we progress towards the European opening bells.

EUR/USD back above daily pivot at 1.0544                                                    

Currently, EUR/USD turns positive near 1.0560, although finds fresh sellers lurking just ahead of the last. The main currency pair paused its recent losing streak and jumped back on the bids amid an extended phase of bullish consolidation seen in the greenback across the board, after last week’s rally in light of monetary policy divergence tilting in favor of the Fed and the buck.

The recovery in the major looks fragile and short-lived as the US dollar is expected to rule the roost going forward, with a 25bps Fed rate hike priced-in by investors. While markets also continue to digest the dovish guidance provided by the ECB last week.

Ahead of the FOMC decision due in the second-half of this week, markets will look forward to the German ZEW sentiment and US retail sales data for fresh incentives on the pair.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0607 (5-DMA). A break beyond the last, doors will open for a test of 1.0621 (20-DMA) and from there to 1.0642 (10-DMA). On the flip side, the immediate support is placed at 1.0526 (5-day low) below which 1.0503 (multi-month low) and 1.0456 (March 2015 low) could be tested.