EUR/USD retreats from 200-DMA hurdle

The greenback selling pressure seems to have abated, with the EUR/USD pair trimming some of its strong gains to 4-1/2 month peaks and retreated few pips to currently trade around 1.0880-85 band. In absence of any fresh fundamental development, the pair's retracement during early NY session could be attributed to some profit taking from the very important 200-day SMA hurdle near the 1.0900 region. A modest bounce in the US equity markets, and treasury bond yields, helped the key US Dollar Index to bounce off multi-month lows and collaborated to the pair's minor retracement. Despite of the minor pull-back, the pair remains well bid near the highest level since Nov. 11 amid growing skepticism over the Trump administration's ability to deliver on promised tax reforms and infrastructure spending. Meanwhile, today's upbeat release of German IFO Business Climate index for March might continue to support the shared currency and should limit any immediate corrective slide ahead of a speech by the Chicago Fed President Charles Evans, later during the day. Valeria Bednarik, Chief Analyst at FXStreet writes, "the technical picture favors a continued advance, as the price finally broke above the 1.0820 region, a major Fibonacci level, now support, and with February's monthly high at 1.0828. In the 1 hour chart, the RSI indicator keeps heading north around 77, while the Momentum indicator retreats from overbought levels, diverging from price action as the price keeps posting higher highs above bullish moving averages. In the 4 hours chart, technical indicators keep heading north, despite being in extreme overbought territory, whilst the 20 SMA turned north below the current level, supporting further gains towards 1.0930, the 61.8% retracement of the post-US election slump."