EUR/USD slips to 1.1180 on gold-drop led USD rebound

The EUR/USD pair is now testing daily lows reached near 5-DMA located at 1.1180, and now looks poised for further downside as the USD rebound picks-up pace across the board.

EUR/USD: Sellers back in control, but for how long?

Despite the releases of solid German IFO surveys, the EUR/USD pair reversed course and fell sharply below 1.1200 levels, in response to resurgent broad based USD demand, after gold prices witnessed a sudden downward spike to $ 1239 levels.

The sharp drop in the yellow metal can be attributed to renewed uptick in the US yields, as risk-on sentiment remains at full steam during the European session.

Moreover, markets prefer to hold the US currency ahead of the crucial US durable goods data, which is also one of the reasons behind the greenback’s comeback against most of its major rivals, including the Euro.

All eyes now remain on the US durable goods data and ECB President Draghi’s speech, which will provide fresh trading impetus for the week ahead.

EUR/USD Technical Levels

In the view of Yuri Papshev, Independent Analyst: “Technical indicators on the 1-hour, 4-hour, weekly charts are deployed to short positions. In the event of a breakdown of the short-term support level 1.1175 (200-period moving average and the bottom line of the rising channel on the 1-hour chart), the EUR / USD pair will continue to decline. The nearest targets are support levels 1.1160 (144-period moving average on the 4-hour chart), 1.1128 (200-period moving average on the 4-hour chart). Resistance levels: 1.1230, 1.1280, 1.1340, 1.1600.”