Risk appetite came back during the Asian session, as the Nikkei 225 surged over 1,000 points, in spite of tepid data in the region and a slide in the Shanghai Composite after the long holiday. Chinese Trade Balance released overnight showed yet another drop in exports and imports, with the first down by 6.6% in January, and the second down 14.4%, down by fifteen month in-a-row. Anyway, European stocks opened strongly higher, leading to an EUR/USD decline below the 1.1200 level.
The EUR will release its trade balance data later today, while ECB's President Mario Draghi is due to testify on monetary policy before the European Parliament's Economic and Monetary Affairs Committee, in Brussels. US markets will remain closed in observance of Presidents' Day, and no data will be released during the session.
View the Live chart of the EUR/USD
Technically, the EUR/USD pair is trading at its lowest since last Wednesday in the 1.1180 region, and the 4 hours chart suggest further declines are likely, given that the price is below a bearish 20 SMA, whilst the technical indicators head sharply lower within bearish territory. Should the price extend its decline below 1.1160, the next support and critical target comes at 1.1120, where some buying interest is expected to give battle. If the level is broken, however, 1.1050 is the next probable bearish target.
The 1.1220 region stands now as the immediate resistance, with a recovery above it favoring a steady advance up to 1.1260, where the pair closed last Friday. Some follow through beyond it should lead to a retest of the 1.1300 region, en route to past week high of 1.1375.
Latest updates on the EUR/USD Forecast
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