EUR/USD takes a sharp U-turn, drops below 1.0450

The EUR/USD pair staged a solid reversal from the daily tops and dropped sharply to the mid-point of 1.04 handle, eroding 30-pips over the last hours.

EUR/USD: Next support lies at 10-DMA (1.0437)

Currently, EUR/USD trades erased gains and trades almost unchanged on the day, meandering near daily lows struck at 1.0444 few minutes ago. A fresh bout of aggressive selling in the main currency pair can be largely attributed to a pick-up in demand for the greenback across the board, which lifted the USD index back on the bids above 103 handle.

From a wider perspective, the euro remains exposed to downside risk as investors favor the US currency in wake of divergent monetary policy outlook between both continents and Trump’s pledge to step up fiscal spending in a bid to revive the US economic growth.

Focus now remains on the US pending home sales data due later today and Thursday’s jobless claims and goods trade balance for next direction on the USD, in absence of significant economic drivers until the US payrolls data due for release next week.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0486 (daily R2). A break beyond the last, doors will open for a test of 1.0500 (round figure) and from there to 1.0500 (round figure). On the flip side, the immediate support is placed at 1.0459 (5-DMA) below which 1.0439 (10-DMA) and 1.0414 (daily S2) could be tested.