EUR/USD tumbles to lows as USD makes a smart comeback

Haresh Menghani FXStreet

• EUR/USD confirms a ceiling near 1.2080-90 region.
• Wage growth data help revive USD demand.
• Surging US bond yields add to the downward pressure.

The EUR/USD pair faded a knee-jerk bullish spike and quickly retreated around 50-pips from session tops.

The pair rallied hard on the back of weaker-than-expected headline NFP number but once again came under some fresh selling pressure near the 1.2080-90 supply zone.

Additional details from the latest US jobs report revealed that unemployment rate held steady at a 17-year low level of 4.1%, which along with a pick-up wages growth revived hopes for a March Fed rate hike more.

The same was being showcased by a sharp rebound in the US Treasury bond yields and eventually helped revive the US Dollar demand.

The pair has now dropped to the 1.2030-25 region and the price-action clearly seems to suggest that a near-term ceiling could already be in place, which is likely to be confirmed once the key 1.20 psychological mark is breached.

Next on tap would be the release of US ISM non-manufacturing PMI, which even if matches consensus estimates might continue to prompt some additional long-unwinding trade through the NY trading session on the last day of the week.

Technical levels to watch

Bulls might continue to guard the 1.20 handle, below which the pair is likely to accelerate the slide towards the 1.1945-40 horizontal support. On the upside, any fresh up-move now seems to confront fresh supply near the 1.2070 region, which if cleared could assist the pair to surpass the 1.2100 handle and aim towards its next major hurdle near the 1.2165 region.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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