EUR/USD tests 100-day SMA support amid continued sell-off in gold
- EUR/USD drops to 100-day SMA, which acted as strong support in early February.
- Gold's sell-off continues with prices hitting the lowest since June 2020.
- The US dollar draws bids on strong US data and losses in the S&P 500 futures.
Euro and other major currencies are losing ground against the dollar alongside gold's relentless decline.
EUR/USD is now trading at the 100-day Simple Moving Average (SMA) support at 1.2021. The average acted as strong support in early February and fueled a bounce to above 1.22.
Gold is trading at $1,713 per ounce at press time, the lowest since June, representing a 0.64% drop on the day. Prices are down more than $100 from the high of $1,816 observed on Feb. 23.
The dollar is likely drawing bids on the back of the upbeat US ISM data released Monday, which showed manufacturing activity increased to a three-year high in February amid a surge in new orders.
Possibly adding to bullish pressures around the greenback are losses in the US stock futures. At press time, the futures tied to the S&P 500 are trading 0.22% lower on the day.
The EUR/USD bears will likely succeed in establishing a foothold below the 100-day SMA if the risk aversion worsens in Europe and the preliminary Eurozone Consumer Price Index (CPI) for February prints below estimates, validating the European Central Bank's dovish stance.
Due at 10:00 GMT, the CPI is expected to show the cost of living in the Eurozone rose 1% year-on-year in February, following January's 0.9% rise.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
