EUR/USD takes a U-turn, slumps to lows near 1.1815
- DXY stages a solid rebound.
- Unperturbed by risk-aversion.
- EZ retail PMI & US ADP – Up next.
After a brief consolidative stint near the midpoint of 1.18 handle, the EUR/USD pair broke to the downside amid resurgent USD demand across the board, now looking to test the 1.1800 mark.
EUR/USD targets 50-DMA support of 1.1759
The main currency pair failed to chew the offers lined up near 1.1850 levels and dropped sharply, as a comeback staged by the US dollar against its main competitors offset the optimism seen around the Euro, following the release of upbeat German factory orders data.
The funding currency also failed to benefit from the extension of the risk-off trades into Europe, reflected by a fall in the European equities, as the USD dynamics continue to drive the spot amid a lack of first-tier macro news from the Euroland.
The latest leg down in the major can be also attributed to downbeat German Markit construction PMI data, which arrived at 53.1 in Nov versus 53.3 previous. However, EUR/USD may find some support near the 100-DMA of 1.1809 ahead of the Eurozone retail PMI reading and US ADP jobs data due later today.
EUR/USD Technical Levels
Karen Jones, Analyst at Commerzbank, noted: “EUR/USD remains below the 78.6% retracement at 1.1976 and is consolidating below here. A close below 1.1768 55 day ma and preferably below 1.1712 the recent low is needed to alleviate immediate upside pressure. The intraday Elliott wave counts remain neutral. The Fibonacci retracement at 1.1976 is regarded as the last defense for the 1.2092 September high. Below the 55 day ma alleviates upside pressure – below 1.1712 the 21st November low should negate upside pressure and allow for slippage back to the 1.1553 7th November low”.