EUR/USD spikes to four-day high, closer to 1.1800 handle

The EUR/USD pair finally broke out of its consolidation range and jumped to a four-day high level, closer to the 1.1800 handle during early NA session.

The pair quickly surged around 30-pips and the up-move was primarily led by some renewed greenback selling interest, with the key US Dollar Index now flirting with lows near the 93.15 level. 

Moreover, possibilities of some stops being triggered on a sustained move above 1.1765-70 supply zone might have also collaborated to the pair's sharp spike over the past hour or so. 

Hence, it would be prudent to wait for a follow through traction to see if the up-move is backed by any genuine buying or is just a stop run amid thin liquidity conditions and absent fundamental drivers. 

Meanwhile, today's release of Bundesbank monthly report, indicating that German growth may exceed their latest forecast remained supportive of the bid tone surrounding the shared currency and helped negate concerns over stronger currency-led easing inflationary pressure. 

Investors' focus would remain glued to the Jackson Hole Symposium, where comments on monetary policy tightening, from Yellen and Draghi, should act as a catalyst determining the pair's next leg of directional move. 

   •  EUR: No policy talk at Jackson Hole points to stability – ING

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "the 4 hours chart favors a new leg higher, although the pair needs to clearly advance the 1.1820 static resistance, to gain a firmer upward momentum. In the mentioned chart, the price remains trapped between horizontals 20 and 100 SMAs, whilst technical indicators advanced within positive territory to fresh daily highs. A daily descendant trend line coming from this year high of 1.0909 offers an immediate resistance at 1.1790, with a break above it being a first sign of a bullish extension for this Monday."