EUR/USD drops back to 1.0850 amid positive equities

The EUR/USD pair failed every attempt towards 1.09 handle and now extends the corrective slide amid a relief rally seen in the European equities and notable USD demand.

The funding currency euro came under renewed selling pressure after the European equities opened on a firmer note and extended yesterday’s recovery mode, while markets book profits on their USD shorts after the recent sell-off, heading into a bevy of Fed speaker scheduled to speak in the NA session today.

Moreover, a lack of fundamental drivers from the EUR calendar, leaves the spot at the mercy of the USD dynamics and risk trends. Later today, the NA session is quite eventful, with a host of US macro news, including the goods trade balance and consumer confidence data.

EUR/USD Technical Levels   

Karen Jones, Analyst at Commerzbank explains, ““The cross has eroded the key band of resistance offered by the 1.0829 February high, the 1.0851 October low, 1.0875 December high and 1.0880 200 day moving average (although we have not yet seen a close above here). The market is immediately bid above 1.0760 – we would allow for the 1.0978/1.1000 region to be reached. This area is where the 100% Fibonacci extension of the January-to-February advance, projected from the February low, coincides with the 50% retracement of the move down from the May peak”.

“Below 1.0760. Will alleviate immediate upside pressure and trigger a slide back to the 55 day ma at 1.0664,” Karen adds.