EUR/USD in the red amid risk-on, ignores EUR/GBP rally

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    The EUR/USD pair extends losses in the mid-Asian trades and now launches attack towards 1.11 handle as the risk-on trades get further fuelled by rallying Asian stocks.

    EUR/USD drops below 5-DMA at 1.1120

    Currently, EUR/USD trades -0.18% lower at 1.1111, heading for a retest of daily lows struck at 1.1105 in early-Asia. The main currency pair came under fresh downward pressure after the Asian stocks witnessed a renewed spurt of buying interest and further bolstered the risk-on market profile, weighing negatively on the safe-haven EUR. The Nikkei jumps 1.18%, while the Chinese equities are rallying almost 2%.

    The EUR/USD pair remains largely unperturbed by the massive rally witnessed in the EUR/GBP cross, on the back of broad GBP weakness. The cable was badly hit after London Mayor Boris Johnson noted that he would back the Brexit campaign over the weekend. Meanwhile, EUR/GBP advances 0.70% to 0.7780.

    Later today, we have a raft of flash manufacturing and services PMI reports from across the Euro area economies, while the second-liner manufacturing data from the US is also due on the cards.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance at 1.1150/53 (psychological levels/ Feb 18 High). A break beyond the last, doors will open for a test of 1.1197/1.1200 (1h 200-SMA/ round number). On the flip side, the immediate support is placed at 1.1084 (Feb 8 Low) below which at 1.1068/64 (Feb 18 & 19 Low) could be tested.
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