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EUR/USD: Sell-off extends amid rebounding European stocks

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 7, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The EUR/USD pair met fresh supply near hourly 20-SMA located at 1.0875 and dropped sharply lower after the European stocks rebounded at open.

    EUR/USD drops to 5-DMA


    Currently, the EUR/USD pair trades -0.43% lower at fresh session lows of 1.0833, breaching 1.0834, the intersection of Friday’s low and 5-DMA. The main currency pair’s extends its post-ECB correction into a second-day this Monday as the risk-sentiment was bolstered by rallying European stocks, which further lifted the demand for the greenback as a risk-on currency. Germany’s DAX rises 1.12%, the UK’s FTSE jumps 0.52% while the Euro Stoxx 50 advances 0.83% so far.

    Moreover, the major remains undermined as the divergence in the monetary policy outlooks between both continents get more pronounced while the countdown for the Fed Dec 16 meeting begins, with eight trading sessions to go for the first lift-off in almost a decade. The Fed rate hike bets received additional boost on Friday after the US NFP report outpaced estimates and added 211k jobs in Nov.

    Looking ahead, the major will continue to track the broader market sentiment in absence of significant macro data lined up for release today. While Euro zone Sentix investors’ confidence and the US labour market conditions report will be published later in the day.

    EUR/USD Technical Levels

    The pair drops further below 1.09 handle, with the immediate support seen at 1.0800 (round number). Selling pressure will intensify below the last, dragging the pair towards 1.0730 (1h 100-SMA). To the top side, the next hurdle in sight is located at 1.0875 (1h 20-SMA) and from there to 1.0912 (50-DMA).
    For more information, read our latest forex news.
     

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