EUR/USD testing 1.13 in early Tokyo dealing

FXStreet (Bali) - EUR/USD is picking up some upward momentum in the first minutes of Tokyo trading, currently being dealt around the 1.13 handle, having recovered from a late US dip towards 1.1275, with the bigger picture turned more bullish after a vigorous bounce overnight, following a mildly disappointing US CPI numbers.

Risk appetite improves, Euro defies logic

While the risk environment continued to support the bid tone for risk-on associated currencies such as the Aussie during Wednesday, which wouldn't have assisted the EUR/USD rise unless due to broad-based USD selling as main driver, as we saw, the current retracement in the Nikkei 225 off highs, together with last minute unwind of positions/position squaring ahead of the FOMC monetary policy decision (due at 2GMT - 30% implied probability of rate hikes based on CME Fed funds), may have contributed to the latest 20 odd pips jump in the Euro.

EUR/USD technicals

Valeria Bednarik, Chief Analyst at FXStreet, shares her view on the EUR/USD, noting: "The 1 hour chart shows that the price is now around its 100 SMA, whilst the technical indicators lost upward potential, and turned lower, approaching now their mid-lines."

"In the 4 hours chart, a neutral stance prevails, with the price unable to establish above a flat 20 SMA, and the technical indicators stuck around their mid-lines. The upcoming direction depends solely on FED's decision now, with the dollar seen appreciating should the Central Bank pull the trigger", Valeria adds.