FXStreet (Mumbai) – EUR/USD’s recovery from post-ECB lows failed just shy of 1.09 handle and the prices dropped sharply to session lows near 1.0830 region, before reverting to the mid-point of 1.08 handle, where it now wavers.
EUR/USD sold-off into rallying Asian equities
Currently, the EUR/USD pair trades -0.26% lower at 1.0847, retreating slightly from fresh session lows struck at 1.0832 in last hours. The main currency pair came under renewed selling pressure after the risk-on sentiment extended into the Asian trades, with the region’s indices bouncing higher after witnessing steep losses the day earlier. The persistent favourable sentiment towards risk assets halted the carry unwind in the euro and hence, keeps EUR/USD undermined.
Moreover, the major remains weak as market continue to digest the surprisingly dovish comments from Draghi at the ECB press conference yesterday. Draghi noted that the ECB may re-evaluate the stimulus measures in March in wake of the heightened global uncertainties and recent oil price declines. Following Draghi’s comments, EUR/USD dropped as low as 1.0777, losing over a cent, although quickly recovered ground and regained 1.08 handle as dust settled over the ECB event.
In the day ahead, EUR/USD may remain pressured amid re-emergence of risk-on trades, while with the divergent monetary policy outlooks back on investors’ minds, the US currency will remain in favour.
EUR/USD Technical Levels
In terms of technicals, the pair finds the immediate resistance is seen at 1.0900 (round number/ daily high). A break beyond the last, doors will open for a test of 1.0942/50 (100-DMA/ psychological levels). On the flip side, the immediate support is placed at 1.0803 (Jan 13 Low), below which 1.0782/77 (daily S1/ Jan 21 Low) could be tested.
(Market News Provided by FXstreet)