EUR/USD drops further to test 20-DMA, near 1.0880

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 28, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - A renewed bout of selling interest is seen around EUR/USD, knocking it off to fresh session lows as the US dollar gradually regains footing against its major competitors.

    EUR/USD heads towards 20-DMA at 1.0877

    Having peaked just ahead of 1.09 handle, the main currency pair continues to correct lower as the common currency failed to benefit from the risk-off trades across the financial markets, the central banks’ divergent monetary policy outlook becoming more prominent after yesterday’s Fed decision. At time of writing, EUR/USD hover near fresh session lows reached at 1.0880, down -0.08% on the day.

    The FOMC statement read less dovish than expected as the Fed kept its gradual rate hikes stance intact, although did take notice of the recent global uncertainties and market turmoil. While the ECB at its meeting earlier this month hinted at another round of easing at its policy decision in March.

    As markets continue to mull over the recent Fed outcome, attention now shifts towards an action-packed trading session ahead, with plenty of risk events for the major. During the European session, we have the German inflation report, which expected to show a severe drop in prices on the back of the recent oil slump.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance is seen at 1.0922/24 (Jan 21 High/ 100-DMA). A break beyond the last, doors will open for a test of 1.0941/ 57 (Jan 19 High/ daily R2). On the flip side, the immediate support is placed at 1.0870/67 (1h 200-SMA/ 10-DMA), below which 1.0803 (Jan 13 Low) could be tested.
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