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Forex pairs in this Article » EUR/USD (Barcelona) - The EUR/USD cross bounced sharply off of key “correction support” of 1.3488 Tuesday as rumors and news of more delays in getting to a resolution in Washington forced money out of the greenback.

EuroZone data, a Draghi speech, US data and US politics to drive trading Wednesday

EUR/USD traders saw a reversal in the most recent trend in weakness as the Dollar weakened throughout the US session. The weakness clearly intensified throughout the day as news headlines pointed to at least another day without a resolution to the debt ceiling issues. The assumption still appears to be that an agreement will be reached prior to the debt ceiling deadline. However, every minute that passes turns the heat up a little more on the risk markets and the US Dollar.

Wednesday will bring EUR/USD traders EuroZone CPI and trade balance data early in the session as well as US TIC Flows, the US NAHB Housing Market Index and the US Fed Beige Book Survey later in the session. Additionally, they will be monitoring comments by ECB President Mario Draghi.

Technical outlook for EUR/USD

Technicians say the EURUSD hit correction support at 1.3488 again Tuesday. Any close below that will lead to a quick drop to 1.3447. The first two resistance levels for EUR/USD come in at horizontal lines of 1.3597 and 1.3606.
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