The EUR/USD pair extended its bearish slide and dropped to a fresh session around 1.0700 neighborhood during early NA session.
Currently trading around 1.0715-20 region, the pair on Monday came under renewed selling pressure and now seems to have confirmed rejection at 100-day SMA resistance. The pair reversed Friday’s up-move, led by mixed US jobs report and dropped to fresh multi-day lows amid broad based greenback recovery, with the key US Dollar Index recovering back above 100.00 mark and is currently hovering around daily peaks near 100.10 region.
In absence of any fresh fundamental developments and virtually empty US economic docket, Monday’s reversal slide could be attributed to short-dollar unwinding trade after the pair repeatedly failed to conquer 100-day SMA strong hurdle, despite of upbeat German factory orders data and in-line Euro-zone Sentix Investor Confidence index.
Meanwhile, possibilities of some stops being triggered on a decisive break below 1.0730 horizontal support could have also collaborated to the pair’s sharp slide in the past hour or so.
Valeria Bednarik, Chief Analyst at FXStreet notes, “From a technical point of view, and according to the 4 hours chart, the risk is towards the downside, given that the price was unable to advance beyond a now modestly bearish 20 SMA, whilst technical indicators head south within negative territory, but with limited downward momentum. Nevertheless, the pair is range bound, with a major support are around 1.0700/20, where the pair has a bullish 100 SMA and the 31.8% retracement of the November/January slide. Seems unlikely that the pair can break below it, but if it does, the decline can extend down to 1.0650.”
She further writes, “To the upside, the immediate resistance comes at 1.0770, followed by last week high of 1.0828. Still the pair needs to extend beyond 1.0840, to confirm further advances during the upcoming sessions.”
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