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EUR/USD ENTERS A CONSOLIDATION PHASE AROUND MID-1.1800S, US DATA EYED

•  Catalan election results continue to weigh on EUR.

•  Reviving USD demand seemed to cap gains. 

•  Spanish PM Rajoy’s speech/US data eyed.

 

The EUR/USD pair has managed to recover part of its early fall and now seems to have entered a consolidation phase around mid-1.1800s.

 

The pair's initial slump, amid renewed concerns over a possible political turmoil in Spain after a victory for separatists in a Catalan vote on Thursday, found decent support ahead of the 1.1800 handle. Further gains, however, remained capped as investors now look forward to the Spanish PM Rajoy's speech, scheduled at 13:00 GMT.

 

Adding to this, a modest pickup in the US Dollar demand, supported by the US Senate's approval to fund the federal government through Jan. 19 and avert a government shutdown, further collaborated towards keeping a lid on any additional recovery move.

 

Meanwhile, investors now seemed to refrain from placing aggressive bets amid pre-holiday thinned trading conditions and preferred to wait for today's US economic releases for fresh impetus.

 

Today's US economic docket features the release of personal income/spending figures for November, along with the Fed's preferred inflation gauge - core PCE price index, Durable Goods Orders, New Home Sales and the Michigan consumer sentiment index.

 

Technical levels to watch

 

Any subsequent recovery might now confront fresh supply near the 1.1870-75 region and is closely followed by the 1.1900 handle. On the flip side, the 1.1820-15 region now becomes an immediate support to defend, which if broken is likely to accelerate the fall towards 50-day SMA support near the 1.1765 region.

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