• Resurgent USD demand exerts pressure for the third straight session.
• Selling pressure seems to have receded, at least for the time being.
The EUR/USD pair maintained its heavily offered tone through the early NA session, albeit the selling pressure now seems to have receded, at least for the time being.
The pair remained under some selling pressure for the third consecutive session and extended its sharp retracement slide from a possible double-top formation just ahead of the 1.2100 handle, coinciding with 2017 yearly tops touched in September.
A strong follow-through US Dollar buying interest, supported by growing bets for additional Fed rate hike moves in 2018, has been one of the key factors weighing heavily on the major.
Today's downfall could also be attributed to some technical selling following yesterday's bearish closing below the key 1.20 psychological mark, and a subsequent weakness below 1.1960-55 support area.
As Valeria Bednarik, American Chief Analyst at FXStreet writes, “the pair is developing well below a bearish 20 SMA, while technical indicators continue heading lower around oversold readings. The 100 SMA in the mentioned chart converges with the Fibonacci support, further indicating that the bearish momentum will likely accelerate on a break below 1.1920.”
With the only scheduled release of JOLTS job opening data, the US economic docket lacks any major market-moving economic releases and hence, the USD price dynamics would continue to act as an exclusive driver of the pair's movement on Tuesday.
Technical outlook
Bednarik further adds: “The downward correction in the EUR/USD pair is about to reach an inflection point, as its near the 50% retracement of the previous three week's rally around 1.1920. Failure near 1.2100 and a break below the mentioned Fibonacci support, should be quite discouraging for bulls, and additional profit taking should result in lower lows ahead.”
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.