EUR/USD remains offered, meets support near 1.2060

  • EUR/USD loses further momentum and drops to 1.2060.
  • The better tone in the dollar keeps weighing on the pair.
  • ECB’s Lagarde participates in the EuroGroup meeting.

The selling pressure keeps hurting the single currency and drags EUR/USD further south of the 1.2100 mark at the beginning of the week.

EUR/USD looks to USD, ECB

The continuation of the bid bias around the greenback puts EUR/USD under extra downside pressure and forces it to print new 2021 lows in the 1.2060 region on Monday. This area is also coincident with a Fibo retracement of the November-January rally.

As usual in past sessions, the improvement in the sentiment surrounding the buck has not only tempered the rally in the pair but is has also casted doubts over the resumption of the uptrend at some point in the short-term.

On another front, further effervescence in the Italian political scenario is expected to slowly return to the markets after PM Conte’s Administration will face a confidence vote on Tuesday.

In the broader picture, the risk-associated space failed to pick up upside traction so far in spite of the better-than-forecast results from the Chinese docket earlier in the Asian trading hours.

In the euro docket, ECB’s Lagarde and Panetta will participate in the EuroGroup meeting later on Monday. Earlier, final Italian CPI for the month of December showed consumer prices rose 0.2% MoM and contracted 0.2% YoY.

Nothing scheduled data wise across the pond as US markets will remain closed due to the Martin Luther King Day holiday.

What to look for around EUR

The upside momentum in EUR/USD run out of steam in the 1.2350 area earlier in the month. The subsequent corrective downside breached already the 1.2100 mark and appears to still have further legs to go. Despite the corrective downside, the outlook for EUR/USD remains constructive and appears supported by prospects of a strong recovery in the region (and abroad), which is in turn underpinned by extra fiscal stimulus by the Fed and the ECB. In addition, real interest rates continue to favour the euro area vs. the US, which is also another factor supporting the EUR along with the huge long positioning in the speculative community.

EUR/USD levels to watch

At the moment, the pair is losing 0.08% at 1.2064 and faces the next support at 1.2059 (2021 low Jan.18) seconded by 1.2058 (weekly low Dec.9) and finally 1.1976 (50% Fibo of the November-January rally). On the flip side, a break above 1.2349 (2021 high Jan.6) would target 1.2413 (monthly high Apr.17 2018) en route to 1.2476 (monthly high Mar.27 2018).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD extends losses after US PMI smashes estimates with 60.8

EUR/USD is under pressure below 1.2050, extending its falls after the US ISM Manufacturing PMI beats expectations with 60.8 points. The US Senate may take up the stimulus package as soon as Wednesday.


GBP/USD retreats from 1.40 as US yields resume their rise

GBP/USD is trading around 1.3950 but off the highs. US bond yields have resumed their gains, boosting the dollar. The US ISM Manufacturing PMI and stimulus news are awaited. Markit's final UK Manufacturing PMI for February was revised up to 55.1 points.


Dogecoin on the verge of a 50% breakout

DOGE price is consolidating in a descending triangle pattern, hinting at a 50% breakout soon. It has slid below the support provided by the 50, 100, and 200 four-hour moving averages indicating a lack of buyers.

Read more

XAU/USD trims a part of intraday gains, bearish bias remains

Gold gained some positive traction on Monday, albeit lacked any follow-through buying. The set-up favours bearish traders and supports prospects for a further depreciating move. A sustained move beyond the $1772-73 region might prompt some short-covering bounce.

Gold news

US Dollar Index looks consolidative around 91.00 ahead of ISM

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors, navigate the area of 3-week tops just above the 91.00 mark at the beginning of the week.

US Dollar Index News