EUR/USD takes a sharp U-turn, tumbles to fresh session low
|The EUR/USD pair faded a knee-jerk bullish reaction to the ECB President Mario Draghi's opening remarks and dropped to fresh session low near the 1.0870-65 region.
Spot ran through some fresh offers near 1.0930-35 resistance area after Draghi reiterated that although downside risks to the economy have diminished and economic expansion will continue to firm and broaden, very favorable financing conditions were still necessary to raise inflation to target.
• Draghi speech: No need to discuss guidance sequencing
Adding to this, his comments that the easing bias is linked to ECB's mandate on inflation (not on growth) and that the governing council did not discuss removing easing bias in interest rates further collaborated to the pair's sharp reversal from session tops.
• Draghi speech: We have not discussed exiting stimulus
With Draghi's comments acting as an exclusive driver of the pair's volatile moves in the past hour or so, market seems to have largely ignored dismal US macro data, albeit seems to have collaborated towards limiting further downslide.
Technical levels to watch
Immediate critical support is pegged at 200-day SMA near 1.0840 region, which is closely followed by support at 1.0820 level (Monday's low). On the upside, any recovery move back above the 1.0900 handle might continue to confront resistance near 1.0930-50 region, which if conquered might triggered a fresh leg of up-move beyond the key 1.1000 psychological mark towards testing its next static hurdle near 1.1025-30 area.
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