EUR/USD comes under pressure near 1.0830 on ECB

EUR/USD drops to daily lows near 1.0830 on Thursday.
The ECB event falls on the dovish side and hurts the euro.
ECB’s Lagarde said the PEPP could run beyond end of 2020.

Pablo Piovano FXStreet

The selling bias is now dominating the sentiment around the shared currency and forces EUR/USD to shed further ground and flirt with the 200-hour SMA in the 1.0830 region.

EUR/USD offered on ECB

EUR/USD is deteriorating further on Thursday as European markets’ session is drawing to a close.

In fact, the single currency lost the grip on Thursday after ECB’s President Christine Lagarde stressed that the current PEPP could be extended beyond year-end, highlighting at the same time that this could be the central bank’s best tool.

Lagarde also reiterated that the central bank remains ready to act in case of need and adjust its policy tools accordingly. The central banker stated that €3 trillion are available to banks at negative rates.

In an attempt to reinforce the region’s links, Lagarde said the bank will not tolerate any risks of fragmentation in the bloc.

On the USD-side, Initial Claims rose by 3.839 million during last week, while Personal Income and Personal Spending contracted at a monthly 2.0 and 7.5%, respectively.

EUR/USD levels to watch

At the moment, the pair is losing 0.18% at 1.0851 and faces immediate contention at 1.0814 (78.6% Fibo of the 2017-2018 rally) seconded by 1.0727 (weekly low Apr.24) and finally 1.0635 (2020 low Mar.23). On the flip side, a break above 1.0944 (55-day SMA) would target 1.0990 (weekly/monthly high Apr.15) en route to 1.1034 (200-day SMA).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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