After four days of gains, EUR/USD shows signs of waning upside momentum on Thursday. As a result, the pair has reversed last week’s post-ECB sell-off, when the prices dropped to 21-months lows below the 1.12 handle.
The advance was mainly due to a weaker dollar demand as the government bond yields hovering near weekly lows. Hopes for avoiding hard Brexit played into the euro’s hands as well. Meanwhile, the eurozone industrial production rose by 1.4% on a monthly basis, beating the market’s expectations. And German inflation was more or less in line with initial estimates and didn’t affect sentiment around the common currency.
Looking ahead, EUR/USD could resume the ascent should dollar demand remain subdued. However, it looks like that at this stage, the pair is preparing for a bearish correction that could take place before the end of this week.
Technically, a clear break above the 1.1340 resistance is needed for a further rally. This region looks rather strong, and the pair will hardly be able to firmly settle above it without additional catalysts or drivers.