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EUR/USD halts a 2-day rally, surrenders 1.09 handle

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 8, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - Having peaked at 1.0940 levels in opening trades, EUR/USD drifts lower and runs through fresh sellers below 1.09 handle over the last hours as risk-on dominates Asia on stabilizing Chinese equities.

    EUR/USD drops to lows near hourly 200-SMA

    Currently, the EUR/USD pair trades 0.44% lower at 1.0884, recovering slightly from fresh session lows of 1.0873 struck near the hourly 200-SMA at 1.0879. The main currency pair halts a 2-day rally and sees steep losses this session as the demand for safe-havens such as the euro was hit on the back risk-on relief rally seen in China’s stock markets, after PBOC fixed USD/CNY rate lower today and the authorities shelved the circuit breaker after the previous sell-off.

    Moreover, the US dollar staged a solid come-back against its major competitors on the back of re-emergence of risk-on trades and also markets bid the greenback ahead of the crucial US payrolls data due later in the day.

    Meanwhile, in absence of first-tier economic data from the Euro land, markets will watch for second-line of releases viz., the German industrial production and trade balance, before the main risk event for today, the US NFP.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance is seen at 1.0940/42 (daily high/ hourly R2). A break beyond the last, doors will open for a test of 1.0984 (100-DMA). On the flip side, the immediate support is placed at 1.0814/11 (1h 100 & 50-SMA), below which 1.0769 (Jan 7 Low) could be tested.
    For more information, read our latest forex news.

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