However, EUR/USD managed to quickly bounce from lows, although the recovery has been capped by the 1.3320 area. The pair is currently quoting at the 1.3315 zone, recording a 0.4% loss on the day. The recent release of the US Reuters/Michigan consumer sentiment index below expectations has done nothing but add to the USD strength.
"The hourly chart shows indicators heading strongly south below their midlines, while current candle opened below the 1.3320 Fibonacci level, now short term resistance", says Valeria Bednarik, chief analyst at FXstreet.com. "If the pair is unable to quickly regain it, there's scope for a retest of 1.3250/60 weekly lows and 38.2% retracement of the same rally".
"With a double top developing at 1.3400, the 1.3250/60 area stands as the neckline: expect increasing bearish momentum if the level gives up", the analyst adds.