The common currency continued to post declines last week, but the weakness was seen to be stalling as price action continued to retest the support level at 1.1540 level.

While we had previously anticipated a rebound in the currency pair at this level, the consolidation adds to the view that price action could be seen forming a bottom in the near term.

The declines in the euro currency came following Draghi’s comments at the banking conference in Portgual last week.

The ECB Chief stuck to the rhetoric noting that while the ECB is likely to exit its bond purchase program this year, interest rates would remain at historic lows for the near to medium term.

Draghi further added that a deterioration in the economy could keep rates lower for longer.

The euro fell on the news but managed to hold on the strong support level formed at 1.1540 level.

We expect to see the modest recovery in the EURUSD currency pair taking place in the near term.

To the upside, price action will have to test the resistance level formed at 1.1730 region.

Only a breakout above this level will see price action attempting to edge higher.

In the near term, the EURUSD currency pair is expected to remain range bound.

As long as the support level of 1.1540 is not breached, we expect the currency pair to aim for the upside.

A break out above 1.1730 resistance could trigger further gains to 1.1920 – 1.1960 level of resistance.