EUR/USD consolidating strong gains to over 4-month highs

The EUR/USD pair built on weekly bullish gap opening and extended its near-term upward trajectory to over 4-month highs amid fading Trump-reflation trade.

Having failed to push through a healthcare reform bill, markets now seemed to have turned skeptic about the prospects of Trump's promised tax reforms and infrastructure spending, which eventually is weighing heavily on the greenback. In fact, the key US Dollar Index slipped below the 99.00 handle to its lowest level since November 11 and has been a key factor driving the pair higher.

Adding to this, upbeat German IFO Business Climate index for March also underpinned the shared currency and remained supportive of a strong bid tone surrounding the major. 

The bulls, however, took some breather, just ahead of the 200-day SMA important hurdle, and now look forward to speech from the Chicago Fed President Charles Evans later during the NY session. 

   •  EUR/USD downside appears limited – Danske Bank

Technical levels to watch

Bulls would be eyeing for a decisive move through 200-day SMA strong barrier near 1.0890-1.0900 zone, above which the pair seems all set to dart towards 1.0950-55 horizontal resistance ahead of the 1.1000 psychological mark.

On the downside, any retracement now seems to find immediate support near 1.0850-45 region, below which the corrective slide could get extended towards 1.0815 support area. Any further weakness below 1.0800 handle should now be limited near 1.0765 support area.