EUR/USD consolidating yesterday’s strong gains, US data and FOMC in focus

The EUR/USD pair has been confined in a narrow trading range and was seen consolidating previous session’s strong up-surge to 100-day SMA important hurdle.

Currently trading around 1.0785-90 region, the pair reversed part of yesterday's strong up-surge to the highest level since Dec. 8 amid modest greenback recovery. The pair on Tuesday rose sharply after Peter Navarro, head of Trump's National Trade Council, criticized Germany that it is using a “grossly undervalued” Euro to exploit the US and EU trading partners. The pair jumped beyond 1.0800 handle in reaction to the comments, albeit failed to clear an important barrier 100-day SMA near 1.0815-20 region.

Meanwhile, the pair had a little reaction to the final composite Euro-zone PMI print,  which rose to 69-month high in January as investors remained focused on the Federal Reserve’s monetary policy decision due later in the day. Although the Fed is not expected to move on interest rates but the accompanying rate statement might provide some clues over the near-term monetary policy outlook and eventually provide fresh impetus for the pair's near-term direction. 

Technical levels to watch

A follow through retracement below 1.0775-70 immediate support is likely to accelerate the slide back towards 1.0700 handle, en-route 1.0680 horizontal level. On the upside, sustained move above 1.0800 handle, leading to a subsequent strength above 100-day SMA hurdle near 1.0820 region, seems to pave way for continuation of the pair's up-move towards 1.0880 barrier.