FXstreet.com (Córdoba) - After rallying to a 7-week high of 1.3125, EUR/USD lost steam and turned around, erasing intraday gains and turning negative, as market sentiment deteriorated.

Weighed by a soft Spanish auction, mounting speculation about possible ECB ease, lower-than-expected ADP report and declining stocks, EUR/USD slid toward a low of 1.3059. At time of writing, EUR/USD is trading at the 1.3065 area, 0.2% below its opening price, having spent the last hours inside a 20-pip range.

From a technical view, "Initial support zone at 1.3060/70, also 20 day EMA, has been tested so far, with loss of momentum on hourly chart and descending 4h indicators, suggesting that further correction cannot be ruled out", says Slobodan Drvenica, analyst at Windsor Brokers Ltd. "Next support lies at 1.3050/40 area, ahead of more significant 1.3000 level, 50% of 1.2879/1.3125, loss of which would be a signal for stronger correction of larger 1.2660/1.3115 ascend".

However, according to the analyst, early downside rejection and regain of 1.3100 barrier, would shift focus back to the upside targets.