The Euro picks up as risk aversion eases, although the broader bearish trend remains intact.

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• The Euro picks up as risk aversion eases, although the broader bearish trend remains intact.
• The strong US Retail Sales have contributed to pushing back hopes of imminent Fed rate cuts.
• ECB President Lagarde discarded any aggressive easing on Wednesday, which provided some support to the Euro.

The Euro (EUR) is paring some losses on Thursday’s European session. The US Dollar Index has retreated from one-month highs, as the impact of the strong US Retail Sales data faded, although the broader EUR/USD trend remains negative.

US Retail Sales beat expectations on Wednesday, adding to evidence of the solid US economy and endorsing the recent comments from Federal Reserve (Fed) officials, who said it is too early to cut interest rates.

Somewhat later, European Central Bank (ECB) President Christine Lagarde spoke at the Davos summit to discard any aggressive rate cuts and push the bank’s dovish pivot to the next summer. This has provided some support to the Euro.

Later today, a speech by the Atlanta Fed President, Raphael Bostic, the US weekly Jobless claims and housing data are likely to give some guidance to the US Dollar. After that, ECB’s Lagarde is expected to take the stage in Davos again.

The EUR/USD pair is going through a moderate recovery, after having found support at 1.0845 lows on Wednesday. A somewhat xxxx after US Dollar is contributing to the common currency’s rebound, although the broader trend remains negative.

Euro bulls are likely to meet a significant resistance at the 1.0930 area, where a previous trendline resistance and the confluence of the 4-hour 200 and 50 SMAs will challenge bulls.

The pair would need to confirm above that level to ease negative pressure and set its focus back to the previous lower high, at 1.1000.

On the contrary, a reversal at current levels would give fresh hopes for bears to breach Wednesday’s low at 1.8040, confirming below the neckline of a bearish Head and Shoulders (H&S) pattern.

The next targets, in this case, would be 1.0800 and 1.0725. The H&S measured target is the 78.6% Fibonacci retracement of the aforementioned rally at 1.0600.

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