EUR/USD to test key supports around 1.2060 – TDS

EUR/USD has broken below the key support around 1.2130 turning attention quickly to a potential test of key supports around 1.2060, Ned Rumpeltin, European Head of FX Strategy at TD Securities, reports.

Key quotes

“We note that EUR/USD drifted lower overnight, as the EU's slow vaccine rollout and Italian political concerns have also gotten some air time.” 

“Interestingly, the pair now looks to be within easy striking distance of a test of the week’s lows just above 1.2130. We have seen good support emerge around that pivot since Mid-December, so a clear break lower would be seen as a notable event.” 

“We would expect to see some bids emerge around 1.2100/05, but our attention would quickly shift to how spot behaved if we managed to get down toward the next key support at 1.2060. We also note that 1.2064 is the 38.2% Fibo retrace level of the trading range in place since the early-November lows. The 55-dma lurks just below this at 1.2044.”