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EUR/USD reverses a dip to lows, back at 1.0825

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 13, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - EUR/USD accelerated to the downside and hit new session lows just ahead of 1.08 handle post-European open, before retreating slightly to 50-DMA, where it now wavers.

    EUR/USD bounces-off lows at 1.0810

    Currently, the EUR/USD pair trades -0.35% lower at 1.0825, reverting to the 50-DMA. The main currency pair tries hard to stay above 1.08 handle, and quickly reverses a downward spike to fresh daily lows reached at 1.0810 levels in the last hours.

    The elevated opening and the subsequent extension of the previous rally in the European stocks reinforced risk-on sentiment in the markets, weighing on the demand for the euro as a funding currency. Germany’s DAX rises 1.23%, the UK’s FTSE gains 0.89%, while the pan-European benchmark, the Euro Stoxx 50 rallies +1.26.

    Moreover, strengthening US dollar coupled with expectations of an unimpressive industrial production print from the Euro zone continues to keep the bears in control.

    Industrial production in the euro zone is expected to show a 0.2% drop m/m in November, following 0.6% growth reported in October, while growing 1.7% y/y, compared to a 1.9% gain recorded in Oct.

    EUR/USD Technical Levels


    In terms of technicals, the pair finds the immediate resistance is seen at 1.0846/55 (1h 200-SMA/ 10-DMA) A break beyond the last, doors will open for a test of 1.0893/1.0900 (20-DMA/ round number). On the flip side, the immediate support is placed at 1.0801/00 (Jan 8 Low/ psychological levels), below which 1.0770 (daily S2) could be tested.
    For more information, read our latest forex news.
     

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