The pair posted solid gains yesterday, only for it to come undone after failing to breach the 100-day MA (red line) once again. That remains the key line in the sand for the pair on any major upside move for now as it also held a previous move on 1 May.
The 100-day MA rests at 1.0969 today and will be a key level to watch in the sessions ahead.
For now, there is still some signs of mild softness in the dollar to get the day started but the risk sentiment is somewhat more mixed. While US futures are keeping higher, the optimism isn't exactly shared by European equities for the most part.
Granted, European stocks missed out on the late fall experienced by their US counterparts yesterday and that there are also some complications surrounding the EU recovery fund proposal as the "frugals" are coming up with their own plan.
On the latter, it could also prove to be a bit of a headwind for the euro as the divergent views will likely prolong any process to get the proposal ratified or even agreed upon by next year.
Anyway, let's go back to the chart now.
For buyers, the first step is to try and break back above the 100-day MA and attempt to hold a break above 1.1000 to test the 200-day MA (blue line) @ 1.1015.
Those will be the key levels to watch as they will provide sellers with a good area to lean on should the risk mood play out more mixed, keeping dollar weakness at bay.
As for sellers, it is all about preventing a move above those levels for now and to try and look for a move back under 1.0900. That will be the first step before targeting the key hourly moving averages again - currently seen at around 1.0847-61.