The EURUSD pair gained decently last week, with the euro received support both from dollar weakness and a broad rebound in risk appetite. The price has surged to early-August high of 1.1650 earlier on Monday, but the move higher looks to be out of steam for now.
The recent bullish catalyst for the pair was the Powell’s speech at Jackson Hole on Friday, with dollar bulls were disappointed by the lack of hawkish comments as the Fed’s governor tone was rather cautious. As a result, the greenback was hit across the board, which opened the way north for the single currency.
But as the euro strength is mostly derived from dollar retreat, the rally could run out of steam now if the pair doesn’t receive its own bullish catalysts any time soon. A daily close above 1.16 is needed for a confirmation of an upside breakthrough, but the longer the price trades below the 1.1650 intermediate resistance, the higher the risk of a profit-taking and a retreat back to the 20-DMA at 1.1530.