EUR/USD surrenders gains, back below 5-DMA

Despite the drop in the treasury yields, the EUR/USD pair failed to capitalize on its early gains to 1.0650 and fell back to 1.0625 levels.

Trades below 5-DMA

The currency pair is back below the 5-DMA Level of 1.0635. The news of an earthquake in Japan triggered carry unwind in early Asia, thus leading to a rise in the funding currency EUR.

However, Japan eventually lifted the Tsunami warning, which helped stabilize the market. Consequently, the common currency surrendered gains.

The EUR suffered a ten-day slight prior to Monday’s correction, which was largely a chart driven move.

EUR/USD Technical Levels

Pair’s failure to hold above 5-DMA in Asia if followed by a break below the psychological support of 1.06 would open doors for a re-test of Friday’s low of 1.0569, under which a major support is seen at 1.0517 (Dec 2015 low). On the other hand, a breach of immediate resistance at 1.0635 (5-DMA) could yield a rally to 1.0666 (Nov 16 low) and 1.07 handle.