EUR/USD drops further, approaching 1.1600 as Euro tumbles

EUR/USD extends slide after ECB and Draghi, hits lowest since May 30.
US Dollar soars, DXY rises to the highest in a week.

The EUR/USD pair continued to decline during the European session after the ECB meeting. The euro is among the worst performers and is having the biggest slide against the US Dollar in months.

EUR/USD peaked earlier today at 1.1850 and since then has fallen more than 200 pips. Recently bottomed at 1.1618, the lowest intraday level since June 1. From the lows rebounded but it was unable to rise back above 1.1650.

The euro started to slide after the ECB announced it would reduce the QE program in September and ended it in December. “With an unprecedented communication twist, the ECB today more or less announced the end of QE. While the real motivation of this step remains unclear in light of increased uncertainty, the door to extend QE into 2019 has not entirely been closed”, said analysts at ING. The central bank also mentioned that interest rates would remain at current levels at least until next summer.

Yesterday the FOMC announced a rate hike, and the greenback weakened, today the ECB the reduction in the QE program and the euro tumbled. The common currency is even lower against the Swiss franc. EUR/CHF fell from 1.1640 to 1.1560.

EUR/USD Short-term technical levels

The recent decline changed the short-term tone favoring the bearish side. EUR/USD broke decisively a 6-day range to the downside, falling below the 20-day moving average.

To the downside, support levels might lie at 1.1615/20 (daily low), 1.1600 and 1.1550. On the upside, resistances could be seen at 1.1705, 1.1725 (June 8 & 13 low) and 1.1775.

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