EUR/USD drops further to test 1.0850 in early Europe

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 2, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    The EUR/USD extends its bearish tone into early Europe, with the prices miring near session lows as the positive sentiment around the stocks and greenback continues to weigh.

    EUR/USD: A test of Tuesday’s low at 1.0835 looks inevitable

    Currently, EUR/USD trades -0.07% lower at 1.0857, hovering close to fresh session lows struck at 1.0854 last hours. The main currency pair remains under mild selling pressure as the risk-on tone prevalent in the markets continue to favour the risk-currency US dollar. Meanwhile the USD index trades 0.08% higher at 98.44, session highs.

    The USD bulls continue to ride higher on the wave of upbeat US fundamentals, viz., Q4 GDP, PCE index, durable goods and the latest one being Tuesday’s ISM manufacturing PMI. On the other hand, dismal manufacturing readings from the Euro zone as well as Germany continue to dampen the sentiment around the common currency.

    Looking ahead, the risk sentiment surrounding the European equities will drive further moves in EUR/USD, ahead of the closely eyed US ADP report, precursor to Friday’s payrolls data.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance at 1.0894/1.0898 (5 & 100-DMA). A break beyond the last, doors will open for a test of 1.0932/45 (daily R2/ 1h 100-SMA). On the flip side, the immediate support is placed at 1.0835 (four-week Low) below which at 1.0812/09 (Feb 1 & Jan 29 Low) could be tested.
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