EUR/USD holds higher after talk of potential German stimulus earlier
On the one hand, talk of fiscal stimulus is a good thing - especially from Germany - however, it will only come if there is further significant deterioration in economic conditions. So, is that really a good thing? Will it be too late to act if that is the case?
That is the question that traders will have to gauge over the next few quarters when looking at the euro. In the mean time, I would dismiss such hopes as being fluff as it still falls under the category of "all talk but no action".
But what is the price action saying in EUR/USD?
As it stands, price is trying to combat near-term resistance around 1.1055 with the swing region around 1.1070-75 the next level to eye for buyers. There are also large options sitting at 1.1075 so that may yet play a part in limiting gains on the day.
As for any downside move, sellers will have to break through the key hourly moving averages in order to establish some form of near-term control in search of a break below 1.1000.
Yesterday, the lows failed to breach the 200-hour MA (blue line) near the 1.1000 handle and that remains the key line in the sand for any move lower from hereon.