• US dollar strengthens amid risk aversion, DXY up 0.30%.
  • EUR/USD trims a fraction of its recent gains.
  • EUR/CHF plummets more than a hundred pips in minutes.

The EUR/USD is back under 1.0500 as the US dollar strengthened amid a deterioration in market sentiment. At the same time, a sharp slide in EUR/CHF also weighed on the euro.

Wall Street and EUR/CHF on free fall

Leading stock indices in Wall Street are falling by more than 2% and have erased the gains of the previous two trading days. Pessimism about the global economic outlook is back on the table and also affected by more hawkish rhetoric from Federal Reserve and European Central Bank officials.

As risk-off set in, the demand for Treasuries emerged. As a consequence, the US 10-year yield fell to 2.90% and the 30-year to 3.11%. The decline in yields so far prevents a larger appreciation of the US dollar.

The context boosted the Swiss franc and the yen that are the best performers on Wednesday. The EUR/CHF lost more than a hundred pips during the last two hours, falling from 1.0480 to 1.0364 and hitting the euro. Today, Swiss National Bank Chairman Thomas Jordan repeated that they are "ready to intervene in currency markets when necessary."

Is the recovery over?

At the time of writing, EUR/USD trades at 1.0489, the daily low. Price is testing the 55- and 200-hour Simple Moving Averages (SMA). A consolidation below this level should point to a potential end of the rally from the multi-year low. The following support stands at 1.0435, followed by 1.0390.

On the upside, the critical short-term area to watch is 1.0525/30, a horizontal resistance and the 20-hour SMA. Above, the euro should look at 1.0555 and the daily high at 1.0563.

Technical levels

 

EUR/USD

Overview
Today last price 1.0515
Today Daily Change -0.0034
Today Daily Change % -0.32
Today daily open 1.0549
 
Trends
Daily SMA20 1.0578
Daily SMA50 1.0806
Daily SMA100 1.1049
Daily SMA200 1.1303
 
Levels
Previous Daily High 1.0556
Previous Daily Low 1.0428
Previous Weekly High 1.0592
Previous Weekly Low 1.035
Previous Monthly High 1.1076
Previous Monthly Low 1.0471
Daily Fibonacci 38.2% 1.0507
Daily Fibonacci 61.8% 1.0477
Daily Pivot Point S1 1.0466
Daily Pivot Point S2 1.0384
Daily Pivot Point S3 1.0339
Daily Pivot Point R1 1.0594
Daily Pivot Point R2 1.0638
Daily Pivot Point R3 1.0721

 

 

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