• Dovish ECB interest rate outlook prompts some aggressive selling.
• Technical selling/resurgent USD demand aggravates the downfall.
The post-ECB selling around the shared currency remains unabated, with the EUR/USD pair extending its weakness farther below the 1.1700 handle.
Currently trading around the 1.1675-70 region, the pair has now retreated nearly 200-pips from intraday tops and the ongoing slump could be solely attributed to the ECB's dovish twist, indicating that rates will remain at current historic lows at least until the summer of 2019.
In the post-meeting press conference, the ECB President Mario Draghi reinforced the statement and said that the governing council did not discuss when to raise rates, citing an undeniable rise in uncertainty due to geopolitical reasons.
This coupled with resurgent US Dollar demand, further supported by stronger than expected US monthly retail sales data, further aggravated the selling pressure and contributed to the pair's sharp downfall to 1-1/2 week lows.
Meanwhile, technical selling/long-unwinding pressure, on a sustained break below the 1.1725 strong horizontal support could also be one of the factors behind the pair's latest leg of sharp fall over the past hour or so.
It would now be interesting to see if the current downfall marks the resumption of prior depreciating move or the pair is able to find some buying interest at lower level amid highly oversold conditions on the 1-hourly chart.
Technical levels to watch
A follow-through weakness below 1.1655-50 area has the potential to continue dragging the pair further towards early June swing lows support near the 1.1620-15 region en-route the 1.1600 round figure mark.
On the upside, any meaningful recovery attempts might now confront immediate resistance near the 1.1725 zone, which if cleared might trigger a short-covering bounce back towards reclaiming the 1.1800 handle.
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