FXStreet (Guatemala) – EUR/USD is trading at the lowest levels since 3rd Decembers rally from 1.0518 that reached 1.0981 on the same daily stick when Draghi shocked the markets with a lack of commitment to what the market had already priced in.
The price action has been in recovery on the 1.08 handle and at the point of the 200 SMA on the 4hr chart at 1.0810. The lows were 1.0800 the figure in fact.
Data has been mixed for the euro at the start of the year with German CPI well below expectations but a continued recovery in the manufacturing sector stands the recovery in the economy in good stead and ultimately should lead to inflation getting back on track down the line and supportive of the single currency.
However, the euro is far from out of the weeds yet and we have plenty of risks that lie ahead that could leave the euro tangled. This week holds the Nonfarm Payrolls for example and FOMC minutes. It really now depends on whether the Fed can follow though with conviction and that will be data dependent.
EUR/USD levels
Technically, Valeria Bednarik explained that, in the 4 hours chart, the technical indicators have stalled their declines near oversold levels, but are far from suggesting a stronger upward corrective move.
“The daily low is also the 50% retracement of the December rally, which means that a break below it, should lead to further declines towards the 1.0700 figure.”
We also have the 4hr chart’s 200 SMA at 1.0810 to cross through yet while RSI is stalling, back above 30 and offering a more neutral tone for now.
(Market News Provided by FXstreet)