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  • US Dollar rises sharply versus main European currencies on Wednesday.
  • EUR/USD drops sharply after being rejected from above 1.2000.

The EUR/USD dropped further during the American session and fell to 1.1820, reaching the lowest level since last Friday. As of writing, it trades at 1.1830/35, down 70 pips for the day, the worst day in two weeks.

The move lower is being driven mainly by a stronger US dollar versus majors. The DXY fell on Tuesday to the lowest in two years at 91.70, and now it stands around 92.80, after staging a strong recovery.

Economic data helped the greenback yesterday and today’s ADP report that came in below expectations did not weigh on the dollar. Not even lower US yields and higher equity prices in Wall Street, are affecting the greenback.

The euro came under pressure earlier following comments from ECB’s Lane who said that EUR/USD matters for the central bank. Previously to the correction, the pair reached at 1.2011, the highest level since April 2018.

Technical outlook

The primary trend in EUR/USD is bullish, but in the short-term, the downside correction that started could keep going, particularly if it holds under 1.1850. Below 1.1800, the next strong support is seen at 1.1755/60 (last week low). On the upside, above 1.1915, the euro will likely remove the bearish pressure while in order to open the door to further gains it needs to consolidate above 1.2000.

 

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