The EUR/USD corrected the extreme overbought conditions reached on Tuesday, aided by a weak schedule during the Asian session and with no relevant publications in the EU or the US. The dollar, however, remains weak across the board, trading near multi-month lows against most of its major rivals and at the levels last seen more than a year ago against the common currency, despite Kick in progress.
Market attention is now focused on Thursday, as the ECB will hold a monetary policy meeting, while at the beginning of the day, Australia will publish its monthly employment figures and the Bank of Japan will also hold its monetary policy meeting. The European Central Bank is expected to remain on hold, with most analysts predicting that the September meeting will provide clearer clues about the tightening of monetary policy, but investors will look at Draghi's words as Custom, for advice on when and how.
Meanwhile, the pair retreated to 1.1514 before bouncing modestly after the London opening, holding the bullish position, as the intraday fall stalled well above a SMA bullishness of 20, currently around 1,1500, while the majors Moving averages extended their gains below the shortest. Technical indicators have corrected extreme overbought conditions, now returning north well above their midlines.
In the short term, the pair has immediate resistance at 1.1550, followed by the maximum set at 1.1582. Above the latter, 1.1615, May 2016 high comes next. To correct lower, the pair needs to break below 1.1490, with scope then to drop down to the 1.1440 / 60 price zone.