EUR/USD stays well on the defensive and breaches 1.1700

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Sellers remain in control of the broad sentiment surrounding EUR/USD and have dragged the pair to fresh two-month lows in the area below 1.1700 the figure on Wednesday. Pablo Piovano from FXStreet sees scope for extra losses in the near-term.

Key quotes

“Recent ECB-speak put the level of the exchange rate back on top of the debate and also collaborated with the current leg lower in the euro despite the economic recovery in the euro bloc looks well and sound (for now). It will be an interesting session data-wise on both sides of the Atlantic, as advanced PMI prints are due along with Fed-speakers and another testimony from Chief J.Powell.”

“The breach of the key contention area in the 1.1700 neighbourhood has opened the door to a deeper retracement in the short-term horizon, although the next support of relevance emerges around 1.15, or March’s tops. It seems quite unlikely a move to this level, however, as it would need a sharp deterioration of the macro outlook and/or a (more?) dovish shift from the ECB.”

“A bullish move seems unfavoured for the time being, although the resumption of the bullish bias is expected on a clear of the 1.1900 yardstick.”

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