EUR/USD weakens farther below 1.23 handle, drops to near 2-week lows

   •  Reviving USD demand prompts some aggressive selling at higher levels.
   •  Technical selling adds to the pressure and collaborates to the downfall.
   •  This week’s important macro releases should determine the near-term trajectory.

After an initial uptick to 1.2335 area, the EUR/USD pair met with some fresh supply and dropped to near two-week lows during the early NA session. 

The pair finally broke down from its 3-day old trading range and retreated farther below the 1.2300 handle. Resurgent US Dollar demand, supported by a goodish pickup in the US Treasury bond yields was seen as one of the key factors behind the pair's break-down on Tuesday.

This coupled with possibilities of some short-term trading stops being triggered, on a sustained break below the 1.2280 support area, further aggravated the selling pressure and collaborated to the offered tone surrounding the major. 

Meanwhile, today's mixed EZ PMI prints for March did little to lend any support to the shared currency, with the USD price dynamics and technical factors acting as key determinants of the pair's downfall to 1.2265-60 area, its lowest level since March 21. 

Later during the NY trading session, the Fed Governor Lael Brainard's scheduled speech is unlikely to provide any meaningful impetus as traders now start repositioning for this week's important macro releases - including the EZ inflation figures and the keenly watched NFP - for fresh directional impetus.

Technical outlook

Valeria Bednarik, FXStreet's own Chief Analyst writes: “The short-term picture is neutral-to-bearish as the pair remains below its moving averages, having met selling interest on an advance to the 1.2340 region, where in the 4 hours chart, the 100 and the 200 SMAs converge directionless. In the same chart, the price is back below a bearish 20 SMA, while technical indicators lack directional strength, the Momentum around its 100 level and the RSI around 41.”

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.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD remains pressured after US data misses estimates

EUR/USD is trading closer to 1.1750, paring its recovery from earlier in the day as the safe-haven dollar is bid. US Consumer Sentiment missed estimates with 72 points in September. The financial woes of China's Evergrande are weighing on sentiment.


GBP/USD trades under 1.38 amid on UK data, dollar strength

GBP/USD is on the back foot, trading under 1.38 after UK Retail Sales figures disappointed with -0.9% in August, worse than expected. Brexit uncertainty and dollar demand weighed on the pair earlier. 


XAU/USD surrenders intraday gains, drops closer to $1,750 level

Gold struggled to preserve its intraday gains and dropped to the lower end of the daily trading range during the early North American session. 

Gold News

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

The latest development in the ongoing SEC vs. Ripple lawsuit is that documents are classified as privileged and blocked for public viewing. Though institutional investors are yet to take big bets on the altcoin in 2021, retail investors are actively trading in XRP.

Read more

US Michigan Consumer Sentiment Preview: Markets will have to look hard for positive signs

Consumer outlook expected to rebound to 72.2 in September. August’s 70.2 was the lowest since December 2011. Inflation and Delta variant wearing on US optimism. Markets face negative dollar risk from fading consumer optimism.

Read more