EUR/USD clocks 4-day low, parity by Q2 2017?

EUR/USD fell to a four-day low of 1.0589 as Asian desks responded to ECB’s ‘dovish taper’ by selling Euros.

Parity for EUR/USD?

The chatter is that EUR/USD could drop to parity by Q2 2017 given the ECB has planned to expand its balance sheet till December 2017.

During the same time, the Fed is widely seen raising rates at least twice. Furthermore, ‘Trump Bump’ is seen pushing up US growth rates.

As of now, the only scenario which could save EUR is a situation where massive risk-off in the markets would force the Fed to delay its rate hike plans.

EUR/USD Technical Levels

The spot was last seen trading around 1.0595. A break below support of 1.0569 (Nov 18 low) would open doors for a sell-off to 1.05 levels (zero figure). A violation there could yield 1.0463 (Mar 2015 low).

On the higher side, breach of 1.0621 (Asian session high) would shift risk in favour of a rise to 1.0692 (23.6% of 1.13-1.0505). Further gains could run into resistance at 1.0768 (Dec 7 high).