EUR/USD retraces from post-Brexit high on Dudley´s comments

After posting a fresh post-Brexit high, the EUR/USD pair retraced sharply and dropped over 60-pips from session peak to currently trade around 1.1260-70 band.

The greenback selling pressure accelerated following the release of US CPI report that showed consumer prices remained unchanged in July. The pair, however, lost its upside momentum and ran through fresh offers at higher level after William Dudley, President of the Federal Reserve Bank of New York, said that the Fed has not ruled out possibilities of raising interest-rate at its meeting in September. 

Immediately after the comments, traders rushed to cover their bearish USD bets that provided a much needed respite for the bulls. Hence, market attention would remain on Wednesday's release of FOMC meeting minutes that would provide fresh cues over the Fed's monetary policy outlook for the rest of 2016 and help investors to determine the near-term direction of the EUR/USD major.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "Short term, the  1 hour chart shows that indicators are retreating from extreme overbought territory, while the price is well above a now bullish 20 SMA, 100 pips below the current level. In the 4 hours chart, technical indicators are also within overbought territory, although beginning to look exhausted, as the pair rallied over 100 pips daily basis. A break below 1.1235, the immediate support, can see the pair returning to the 1.1150/60 region during the upcoming session, with scope to extend its decline afterwards down to 1.1080."

"Support levels: 1.1235 1.1190 1.1150
Resistance levels: 1.1285 1.1325 1.1360"