EUR/USD testing lows near 1.0580, PMIs eyed

The EUR/USD pair is seen meandering near five-day lows below 1.06 handle, and looks vulnerable amid broad based US dollar strength and widening European bond yields in wake of political uncertainty.

EUR/USD offered near 10-DMA at 1.0615

Currently, the spot drops -0.28% to 1.0582, hovering within a striking distance of five-day lows of 1.0577.  The EUR/USD pair remains on the offers as markets reduce their bullish bets on the euro amid political uncertainty in France, with the latest OpinionWay poll showing first-round support for Le Pen rising 1%pt to 27%.

While widening French and German 10-year bond yields continue to undermine the sentiment around the common currency. Furthermore, Greece default worries returned to markets, after the Euro zone finance ministers failed to reach an agreement to rescue the debt-embattled economy, which also adds to the losses in the major.

The main currency pair also suffers on the back of fresh USD buying versus its main competitors, in wake of upcoming Fedspeaks and FOMC minutes, all of which are expected to back the case for further rate rises. In the meantime, focus remains on the Euro area flash manufacturing PMI reports due on the cards in Europe.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.615/22/27 (10, 5 & 50-DMA). A break beyond the last, doors will open for a test of 1.0663 (100-DMA) and from there to 1.0676 (20-DMA). On the flip side, the immediate support is placed at 1.0561 (daily S3) below which 1.0520 (Jan 6 low) and 1.0500 (psychological levels) could be tested.