FXstreet.com (San Francisco) - After falling around 140 pips from 1.2875 and reach 2-month low at 1.2735, the EUR/USD has managed to close the day above the 1.2740 key support. The pair lost 0.40% so far today from opening price action to the current 1.2760 on the back of global concerns on Eurozone recession in 2013 and fiscal cliff fears.

The shared currency came under strong selling pressure amid Draghi’s comments foreseeing a weaker economic situation in the Eurozone throughout 2013. On the other hand, stocks market in the United States collapsing on fears that the status quo consequential from Tuesday's elections with Democrats retaking the White House and the Senate but Republicans holding the House of Representative will mean more problems to address the fiscal Cliff.

The Dow Jones Industrial Average lost 312.95 pts or 2.36% to close at 12,932.73. The S&P 500 declined 2.37% or 33.86 pts to finish at 1,394.53. The Nasdaq Composite fell to 2,937.29 after dropping 74.64 pts or 2.48% so far today.

Trish Regan, Anchor and Editor for BloombergTV, pointed in her Twitter account that it was "One of the biggest sell offs of the year. Wall Street sending its warning to Washington." Regan concluded: "Fix the fiscal cliff...or else."

Late on Wednesday, House Speaker John Boehner said that House Republicans ready to work with President Obama, the House "won't solve fiscal imbalance during lame duck session." Boehner also stated that they are facing "tremendous challenges, opportunities in week ahead," as well as "Americans gave us mandate to work together."

Despite the Bowhner's words, Richard Lee, FXstreet.com analyst comments that "the sentiment here is simply that US policymakers will likely delay an ultimate decision until the last minute, leaving a lot of uncertainty to permeate the market." Lee sees that "with the impending fiscal cliff debate looming over the US,and the world, further US dollar strength is anticipated – particularly against the Euro."

In the same line, “the reality for the markets is that while the Obama win implies more of Fed monetary policy accommodation same, there are a number of potential bumps in the risk road in the next couple of weeks and months that may temper risk appetite," wrote TD Securities analysts Shaun Osborne and Greg Moore. "Not least the fiscal cliff issue, which looks just as big a challenge now as it did yesterday with Congress still divided."

“Overall, the general USD remains highly contingent on the broader tone of risk sentiment which itself is influenced by highly unpredictable headline/event risk”, they added.

The bears just starting to warm up

In the short term, "sentiment shifted to risk aversion, and dollar soars across the board, but when it comes to the EUR/USD, seems bears are just starting to warm up," says Valeria Bednarik, FXstreet.com Chief analyst. "The pair tested and holds quite close to a key support area around 1.2740, 38.2% retracement of its latest daily bullish run from 1.2040 to 1.3170."

Mostly unchanged since early US session, the pair holds above 1.2740 area, 38.2% retracement of the 1.2040/1.3070 rally, that stands as immediate support. "A positive outcome in Greece may see an upward corrective movement, yet if local share markets follow their overseas partners, we may see a retest of mentioned 1.2740," adds Bednarik. "While a break below will surely signal further falls to come this Thursday." Corrective movements should hold below 1.2800 so as bears remain in control of the pair.

According to the FXstreet.com forex studies, the CCI points bullish but Momentum and ROC shows bearish in the 15 minutes charts. In the 1-hour chart, the MACD, CCI, MOmentum and ROC are all bearish.