EUR/USD Drops To Test Last Week's Lows, Bias Point To Further Losses

EUR/USD Current Price: 1.1848

• US dollar jumps across the board as traders look toward the NFP.
• Euro unable to benefit from lower US yields.
• EUR/USD drops to test last week's lows, bias point to further losses.

The EUR/USD accelerated the decline on Wednesday on the back of a stronger US dollar across the board by the end of the month. The pair hit levels under 1.1850, the lowest intraday level in two months. Since the European session, the pair moved with a bearish bias and trimmed losses near the end of the session. The key driver was the rally of the US dollar. The DXY climbed to the highest level since April above 92.40, on end-of-month positioning.

Headline inflation in the Eurozone came in at 1.9%, below the European Central Bank target, but it is expected to rise back above. The number had no impact on the euro. In the US, the ADP employment report came in modestly above expectations. The greenback remained strong after the numbers. The key employment report will be on Friday with the Non-Farm Payroll. On Thursday, manufacturing data is due in the US and also the weekly jobless claims reports. In Europe, the final PMIs readings are due.

EUR/USD short-term technical outlook

The EUR/USD tumbled to test last week's lows at 1.1845, and it managed to remain above. The rebound on course could continue, and will likely face resistance at 1.1880 and 1.1905 (20-SMA in 4-hour chart). Above 1.1905 the positive momentum of the dollar will fade. Technical indicators show mixed signs ahead. A break under 1.1845 should favor a steeper decline. Current buying interest appears to be limited, based on a rebound after a fifty-pip decline, not on a sustainable recovery. The bias continues to be on the downside.

Support levels: 1.1845 1.1795 1.1750

Resistance levels: 1.1875 1.1910 1.1945

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