EUR/USD drops sharply from weekly highs at 1.0685

A sudden upward spike in EUR/USD to weekly tops soon faded, now pushing the rate back towards the mid-point of 1.06 handle amid stalled selling seen in the USD across the board.

EUR/USD retreats as risk-off eases                                                                  

Currently, EUR/USD trades +0.65% higher at 1.0656, retreating from fresh one-week tops reached at 1.0685. The risk-off market environment appears to have cooled-off a bit as oil prices turn positive, weighing on the funding currency euro somewhat.

Further, the US dollar staged a tepid-bounce against most of its major rivals, after having stalled the recent corrective slide, which also collaborated to the latest leg down in EUR/USD.  

However, the major is likely to remain underpinned in the day ahead as the US treasury yields continue to extend its weakness across the curve, which will eventually keep a check on the USD’s recovery.

The major will continue to get influenced by the USD price-action and persisting risk trends, with all eyes now awaiting ECB Draghi’s speech due later today for fresh impetus.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0685 (weekly high). A break beyond the last, doors will open for a test of 1.0700 (round figure) and from there to 1.0741 (20-DMA). On the flip side, the immediate support is placed at 1.0605 (daily pivot) below which 1.0550 (psychological levels) and 1.0515 (multi-month low) could be tested.

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