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EUR/USD risks further downside below 1.1575, ECB Draghi’s speech eyed

  • Back to test 1.1600 amid resurgent USD demand.
  • Stronger Eurozone data ignored.
  • ECB Draghi’s speech in focus.

The EUR/USD pair extended its overnight consolidative mode into Asia, having stalled its recovery from near multi-month troughs of 1.1575 levels, as the bulls lose vigor ahead of the ECB Chief Draghi’s speech scheduled later in the European session today.

EUR/USD attacks 1.16 handle

The spot is seen trading in the lower bound of today’s trading range so far, as the US dollar caught a fresh bid-wave in tandem with the Treasury yields over the last hours. The USD index staged a tepid rebound from a dip to 94.60 levels, now flirting with the session tops of 94.70, up +0.07% on the day.

Moreover, increased nervousness ahead of the ECB President Draghi’s opening remarks scheduled to be delivered at the ECB Forum on Banking Supervision, in Frankfurt, also keeps the EUR bulls at bay, maintaining risks tilting towards the downside. The major seems vulnerable below a break of 1.1575 support, opening doors for a test of 200-DMA at 1.1401.

On Monday, the main currency pair witnessed three-way price action, setting-off the week on the front foot, well above 1.16 handle amid subdued trading activity seen around the greenback across the board. However, EUR/USD failed to sustain above the last in the US session, dropping sharply to 1.1580 levels before finding fresh buyers, which took the pair back above 1.1600 barrier.

Meanwhile, the pair ignored stronger Eurozone PPI and Sentix Investors’ confidence data, as the dust finally settled over the US NFP aftermath. Focus now shifts towards the German industrial production data and ECB Draghi’s speech for fresh momentum on the prices.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet, noted: “The EUR/USD pair managed to recover from a daily low of 1.1579, but ends the day barely above the 1.1600 level, maintaining a heavy short-term technical stance. The pair bottomed near October low at 1.1574, still the level to break to confirm a new leg south that can extend down to 1.1460. In the meantime, the 4 hours chart shows that the price remains below a bearish 20 SMA, while technical indicators stand within the bearish territory, partially losing their bearish strength but far from signaling an interim bottom. Support levels: 1.1575 1.1540 1.1510 Resistance levels: 1.1630 1.1670 1.1700.”

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