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EUR/USD: Sell-off extends post-European open, eyes Tuesday’s low

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 9, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    The selling pressure surrounding the EUR/USD pair intensified post-European open, as the bounce in the European equities added to the bearish bias in the euro.

    EUR/USD fades a spike to 1.0990

    Currently, EUR/USD drops -0.42% to fresh session lows of 1.0962, extending further below 5-DMA (1.0975). The main currency pair’s fragile recovery lost steam at 1.0990 and the prices witnessed fresh spurt of selling interest following an upbeat start to the European markets, which improved risk-sentiment somewhat. Germany’s DAX is up 0.45%, the UK’s FTSE trades 0.25% higher, while the pan-European benchmark, the Euro Stoxx rebounds +0.53%.

    Moreover, with the ECB policy decision due tomorrow, downward pressure continues to mount on the EUR across the board as most major analysts view that the central bank may cut depo rate further into the negative territory as it struggles to meet its inflation target of close to, but not exceeding 2%. While the recent poor services, manufacturing and CPI data also fuels speculation for further easing by the ECB.

    Nothing of note in the day ahead, and hence all eyes remain on the ECB decision and Draghi’s presser for next direction on EUR/USD.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance at 1.1000 (psychological levels). A break beyond the last, doors will open for a test of 1.1042/44 (daily R2/ 200-DMA). On the flip side, the immediate support is placed at 1.0948/40 (10-DMA/ 1h 200-SMA) below which at 1.0911 (100-DMA) could be tested.
    For more information, read our latest forex news.

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