FXStreet (Mumbai) - The EUR/USD pair stalled its minor recovery and resumed the drop post NY close, with the dovish comments from ECB Chief Draghi’s accentuating the downside.
EUR/USD capped below hourly 20-SMA
The EUR/USD pair trades -0.13% lower at 1.0950, retreating from fresh session lows of 1.0938. The shared currency came under renewed selling pressure versus its American counterpart in Asia after the ECB President Mario Draghi offered dovish comments, reiterating the need to re-examine the degree of monetary policy accommodation at the ECB’s December meeting.
Draghi’s intentions to do more, once again highlighted the growing monetary policy divergence between the ECB and FOMC. The Fed left doors open for a rate rise at its Dec 15-16 gathering last week.
Moreover, the major also remains heavy on the back of persisting risk-on sentiment amid rallying Asian equities. Japan’s Nikkei jumps 2.42% while the Australian benchmark rises 0.85%.
Later in the day, we have more of Draghi coming in ahead of a raft of final services PMI from Euro zone and US ADP data. While the main focus now remains on the Fed Chair Yellen’s testimony scheduled post-US open.
EUR/USD Technical Levels
The pair remains below 1.10 handle and keeps falling with immediate support seen at 1.0903/00 (Oct 29 Low/ round number). Selling pressure will intensify below the last, dragging the pair towards 1.0840 (Aug lows) and below that 1.0800 (psychological levels) could be exposed. To the upside, the next hurdle is located at 1.0997/1.1000 (10-DMA/ psychological levels). A break above the last, the prices could climb further towards 1.1019/21 (daily R1 + 1h 200-SMA) and from there to 1.1053 (Nov 2 High).
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