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EUR/USD swings back to 1.0850 as European equities crash

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The EUR/USD pair witnessed sudden bid wave last minutes, lifting the prices from session lows and now storming towards the mid-point of 1.08 handle.

    EUR/USD sees a sudden 80-pips jump

    Currently, the EUR/USD pair trades 0.56% higher at 1.0840, hovering close to fresh session highs printed at 1.0849 few minutes ago. The main currency pair bounced-off lows and jumped nearly 80-pips higher, regaining 1.08 handle beyond, on the back of fresh sell-off seen in the European stocks as the Chinese yuan devaluation-led risk-aversion wave continues to hit the sentiment hard. Germany’s DAX drops over -3.60%, the UK’s FTSE sinks almost 3% while the pan European benchmark, the Euro Stoxx 50 falls -3.30%.

    Moreover, the non-existent demand for riskier currencies continues to weigh heavily on the buck, thereby boosting the bids in the EUR/USD. Meanwhile, markets looked past mixed set of German data and now await the EMU employment and retail trade numbers due for release shortly or fresh cues.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance is seen at 1.0881/87 (1h 200-SMA/ 20-DMA). A break beyond the last, doors will open for a test of 1.0900 (round number/ daily R3). On the flip side, the immediate support is placed at 1.0770/66 (Daily Low/ pivot), below which 1.0718 (Jan 6 Low) could be tested.
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