EUR/USD refreshes session tops and fills weekly gap, dip demand prevails

The EUR/USD pair reversed early dip to sub-1.20 level and refreshed session tops, near 1.2030 level in the last hour.

Earlier today, the pair extended Friday's retracement from fresh yearly tops and was being weighed down by a goodish US Dollar recovery from over 2-1/2 year lows, led by easing tensions over North Korea and weakening of Hurricane Irma.

This coupled with comments by ECB's Benoît Coeure dragged the pair to session low level of 1.1993 during early European session. With the greenback lacking any strong follow through traction, dip demand seems to have emerged at lower levels and helped the pair to fill the weekly bearish gap. 

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The shared currency continued to be underpinned by last week's comments from the ECB President Mario Draghi, which suggested that the central bank would decide on tapering its massive stimulus program at the October meeting. 

In absence of any major market moving economic releases, broader market risk sentiment and the USD price dynamics would remain key determinants of the pair's movement through Monday's trading session.

Technical outlook

Carol Harmer, Founder charmertradingacademy.com notes: "Short term charts look quite well supported at the 1.1980 area but are not oversold as yet...So watch that area...If we lose this and stay below here then Euros are going to come under pressure to that support area I mentioned...To take pressure off the downside we need a break above 1.2130...."