EUR/USD consolidates losses near 1.1850, Catalan vote outcome weighs

• Bounces-off 20-DMA support.
• EU political climate undermines
• Focus shifts to German & US data flow.

The EUR/USD pair keeps its bearish bias intact, despite the recovery from a dip to 1.1817 lows, as the sellers continue to lurk amid the Catalan election results disappointment.

EUR/USD: Sell the bounce?

The spot is seen trying hard to take on the recovery beyond 1.1850 levels, but the EUR looks exposed to further downside risks, as the European traders will hit their desks and react negatively to the Catalan Separatists election victory, which is seen as a big blow to the Spanish political climate in the coming days.

Moreover, the upside consolidative mode seen around 10-year Treasury yields also continue to exert downward pressure on the major. The benchmark 10-year Treasury yield eases to 2.483%, after having hit a nine-month high of 2.504% a day before.

Meanwhile, markets believe that the EUR could have been sold-off into thin trades, as the impact on the Catalan vote outcome is likely to be limited. Later today, the pair will look forward to the German GfK consumer climate and US economic releases for fresh momentum.

EUR/USD Technical Levels

Haresh Menghani, Analyst at FXStreet, explained: “From a technical perspective, the pair’s rejection slide from the 1.1900 handle and a subsequent weakness now seems to point towards additional near-term downside even below the 1.1800 handle towards an important confluence support near the 1.1765 region. The mentioned support comprises of 50-day SMA and a short-term ascending trend-line, which if broken could accelerate the fall back towards 1.1715 important horizontal support. On the flip side, any up-move might now confront immediate resistance near the 1.1870-75 region and is closely followed by the 1.1900 handle.”