EUR/USD retraces from 7-day high, back to familiar range at 1.1110

The EUR/USD pair is seen fading its knee-jerk spike to a 7-day high level of 1.1165 and has now retraced back to familiar trading range to currently trade around 1.1110 region.

Immediately after BOE announced to keep its monetary policy unchanged, the pair spiked to weekly high level but ran into fresh offers at higher levels after the release of better-than-expected US economic data.

In economic releases from the US, weekly unemployment claims remained unchanged at 254,000, holding its lowest level since mid-April. Consensus estimates were expecting the claims to rise and come-in at 263,000. Meanwhile, WPI print of 0.5% for June showed the biggest monthly gain in over a year. 

Strong US economic data provided the much needed respite for the US Dollar bulls and the pair trimmed majority of its BOE-led strong gains. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "Technically, the 1 hour chart shows that the technical indicators are retreating partially from overbought territory, but that the price remains firmly above a bullish 20 SMA. In the 4 hours chart, the price has extended above its 100 SMA for the first time since the Brexit, whilst the technical indicators head modestly higher within positive territory, in line with further gains towards the critical 1.1190 region."

"Support levels:  1.1120 1.1080 1.1045
Resistance levels: 1.1155 1.1190 1.1240"