EUR/USD slides farther below 1.23 mark, hits fresh weekly lows
• EUR weighed down by today’s softer final EZ CPI print.
• A smart USD rebound aggravates the selling pressure.
• Technical studies suggest further near-term downfall.
The EUR/USD pair quickly changed course from an intraday high level of 1.2336 and tumbled to fresh weekly lows during the early NA session.
Against the backdrop of today's softer final EZ CPI print, a smart US Dollar recovery, further supported by a goodish pickup in the US Treasury bond yields, prompted some aggressive selling around the major.
This coupled with upbeat US industrial production, along with the best UoM sentiment index reading since 2004 provided an additional boost to the greenback recovery and continued exerting downward pressure.
Meanwhile, possibilities of some short-term trading stops being triggered below the 1.2300 handle could have further aggravated the fall and contributed to the pair's heavily offered tone for the third consecutive session.
Today's sudden turnaround could also be attributed to some follow-through technical selling, especially after yesterday's bearish break below a short-term ascending trend-line support. Hence, an extension of the bearish trajectory, led by subsequent long-unwinding/fresh shorting, now looks a distinct possibility.
Technical levels to watch
Yohay Elam, Analyst at FXStreet writes: “Looking down, $1.2270 was the March 5th low. It is followed by $1.2205, a trough in mid-February and $1.2155, the March 1st low.”
“$1.2360 worked as resistance in February and serves as the first, albeit weak cap. $1.2412 capped the pair earlier this week and is the next line to watch. $1.2447 is the March 8th high,” he adds further.