EUR/USD testing offers circa 1.1050, risk sentiment improves

EUR/USD is trading with a strong bullish momentum in the Asian session, currently testing offers circa 1.1050 session highs, as the risk sentiment improves, resulting in overly bearish players/weak-handed sellers getting stopped out.

The Nikkei 225 in Japan has been leading the pack by recovering a large portion of its opening losses, last at -0.75%. One would think, however, that the current move higher in EUR/USD, GBP/USD will likely be perceived as an opportunity to re-engage in short opportnities given the state of affairs in the Euro zone post Brexit. As long as uncertainty on the future of the UK in the Euro zone doesn't carify, uncertainty will be a major negative input weighing on the European currencies.

EUR/USD outlook

Technically, Valeria Bednarik, Chief Analyst at FXStreet, does not foresee prospects of a long lasting recovery in the EUR/USD, noting: "The pair has been unable to advance beyond the 50% of it on an initial attempt to recovery, exposed therefore to extend its slide down to a major long term support in the 1.0800/40 region"

"In the 4 hours chart, the 20 SMA has extended its decline down to the mentioned 50% retracement, whilst the technical indicators have bounced modestly from oversold levels, but remain within negative territory, with no actual upward momentum that may suggest a steeper recovery for the upcoming days" Valeria adds.