EUR/USD retakes 1.0800 and beyond as USD extends recent downtrend

The EUR/USD pair has managed to reverse early losses and moved back above the 1.0800 handle during early NA session.

The pair, however, has failed to extend the up-move beyond 1.0820-30 strong hurdle, marking 50% Fibonacci retracement level of 1.1300-1.0341 downslide and also coinciding with Feb. 2017 / Dec. 20163 monthly highs. The pair's latest leg of up-move could be attributed to some renewed greenback selling pressure, with the key US Dollar Index stalling tepid recovery move and dropping back to multi-week lows below mid-99.00s.

Growing uncertainty around the US President Donald Trump's promised pro-growth economic policies, in wake of widespread opposition to the proposed replacement of Obamacare, coupled with perceived less hawkish Fed monetary policy outlook continues to weigh on the greenback and collaborated towards limiting the initial corrective slide witnessed during European session.

Trump Presidency to face serious litmus test - Swissquote

Meanwhile, optimism led by Emmanuel Macron's solid performance in the first French Presidential debate continued underpinning the shared currency and helped the pair to maintain mildly positive tone near multi-week tops. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "in the 1 hour chart, the price is currently developing below a bearish 20 SMA, whilst technical indicators have entered negative territory and maintain bearish slopes, in line with a corrective move. In the 4 hours chart, the 20 SMA maintains its bullish slope below the current level, while technical indicators have retreated from near oversold territory, now losing bearish strength and turning flat above their mid-lines, indicating that selling interest is still limited. The pair can correct down to the 1.0730 region, a former resistance, without actually affecting bulls, as it will take a slide below 1.0700 to revert market's sentiment towards the pair."