EUR/USD: Will the buyers retain control above 1.1200?

The EUR/USD pair consolidated sharp losses induced by a bullish/ hawkish FOMC in Asia, keeping the rate confined within a 30-pips narrow above 1.12 handle, as we progress towards the early European trading.

EUR/USD: Risks remain to the downside on hawkish Fed hike

The spot stalled its post-FOMC selling spiral and managed to regain 1.12 handle, as the US dollar attempted a minor-correction     after yesterday’s massive rebound, following reports of Trump investigation by the special counsel hit the wires in early Asia.

Moreover, the funding currency Euro also found some support from a renewed risk-aversion wave that gripped markets, on the back oil-price weakness and negative Asian indices.

Meanwhile, dust settles over the hawkish FOMC aftermath, as traders gear up for the next central banking event – BOE interest decision and minutes release. Hence, the major will also keep an eye on the EUR/GBP price-action, as the UK retail sales and BOE could have a major impact on the cross, eventually influencing the EUR.

However, the recovery in EUR/USD appears to be limited, as a fresh round of USD buying is expected as the European desks get underway, with traders reacting to the overnight FOMC rate hike decision and on Fed’s plan to normalize its balance sheet this year.

The spot also eagerly await a flurry of macro news from the US calendar, including the jobless claims, industrial production, import prices and Philly Fed manufacturing index, amid a lack of significant drivers from the Euroland today.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet believes: “Intraday noise may last all through the Asian session, but this limited reaction to a hawkish-than-expected tone clearly indicates that the risk remains towards the upside, and will be so as long as the price holds above the base of these last 4 weeks' range in the 1.1080 region. Support levels: 1.1160 1.1120 1.1080 Resistance levels: 1.1250 1.1300 1.1345.”