EUR/USD extends drop towards hourly 50-SMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 10, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    The EUR bears retain control and fade any recovery attempt made by EUR/USD in the mid-European session, now pushing the prices below the mid-point of 1.12 handle.

    EUR/USD losing sight of 1.13 handle

    Currently, EUR/USD trades -0.42% lower at fresh session lows of 1.1244, shedding nearly 60 pips so far this Wednesday. The offered tone around the EUR/USD pair keeps growing bigger, as the European stocks-recovery picks-up pace backed by a solid rebound in the banking sector stocks. The demand for the safe-haven/ low yielding currency euro appears to dissipate as markets look for more returns on their investments from higher-yielding assets such as equities against the backdrop of improved risk sentiment.

    Moreover, markets continue to unwind USD shorts after two back-to back sessions of losses, ahead of Yellen’s testimony due later in the day. Markets await any hint whether the Fed remains committed for four rate hikes this year, given the recent global market turmoil and weak US fundamentals seen since the start of 2016.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance at 1.1300/11 (round number/ daily high). A break beyond the last, doors will open for a test of 1.1338/50 (Feb 9 High/ round number). On the flip side, the immediate support is placed at 1.1229/08 (1h 50-SMA/ 5-DMA) below which at 1.1188/62 (daily S1/ Feb 9 Low) could be tested.
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