EUR/USD surges to 1.20 mark post-ECB minutes

   •  Lack of any dovish remarks prompts short-covering move.
   •  Weaker US bond yields offset a modest USD uptick.
   •  US PPI/unemployment claims eyed for fresh impetus.

The EUR/USD pair caught some fresh bids and surged over 50-pips following the release of ECB Monetary Policy Meeting Accounts (minutes).

The pair has been finding decent support near the 1.1930-20 region and gained some strong positive traction after the latest ECB minutes revealed that the central bank could consider a gradual shift in guidance from early 2018 and showed increasing confidence that inflation pressures would take hold.

In absence of any dovish remarks, the report prompted some short-covering move and lifted the pair back closer to the key 1.20 psychological mark. 

Meanwhile, a mildly softer tone around the US Treasury bond yields, which failed to provide any additional boost to the US Dollar’s uptick, remained supportive of the bid tone surrounding the pair. 

With the key ECB minutes out of the way, traders now look forward to the US economic data - PPI print and the usual initial weekly jobless claims data, for some fresh trading impetus.

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes, “the downside potential is limited, as, in the 4 hours chart, the pair continues finding buying interest around a bullish 100 SMA, although it's also developing below a strongly bearish 20 SMA, this last converging with the 38.2% retracement of the latest bullish run, around 1.1960, now the immediate resistance.”

She further adds: “Beyond the level, the pair could recover up to 1.2000 but would need to settle beyond 1.2030, the next resistance, to actually turn bullish. Technical indicators in the mentioned chart lack directional strength but stand within negative territory. The weekly low at 1.1915, is the support to break to see the bearish movement extending, with 1.1875 the next Fibonacci support, coming next.”