EUR/USD clings to key support near 1.0530, eyes on EZ CPI

The bears take a breather from the overnight sell-off, allowing EUR/USD to breathe a sigh of relief in the Asian session.

The spot is seen clinging to the critical Fib 61.8% (retracement of 1.0341-1.0829) support located at 1.0527, a breach of which is likely trigger a massive sell-off in EUR/USD towards yearly lows struck just ahead of 1.0450 levels.

Bearish bias behind the EUR/USD pair remains intact amid strengthening US dollar and treasury yields, in response to increased odds of a Fed rate hike and Trump’s pro-growth policies announcement.

Additionally, increasing speculations of a Le Pen win in the French elections weigh on the common currency, eventually collaborating to the downbeat sentiment around the major. Marine Le Pen’s victory in the elections implies France’s exit from the EU, which poses a big threat to the EUR.  

Calendar-wise, the spot will look forward to the Eurozone flash CPI data and US unemployment claims data for fresh incentives.

EUR/USD Technical Levels

Jim Langlands at FX Charts explains, “The momentum indicators remain pretty much neutral and a nimble stance is required although the dailies may be hinting of further attempts to the downside in the sessions ahead. Near term support will arrive at the session low below which could then see a move towards 1.0500 and the 1.0493 22 Feb low. Beneath that there is not too much support ahead of the 11 January low of 1.0453.”

“A return to the topside will find offers today at 1.0590/0600 and then again at 1.0630/35 although this looks unlikely today. If wrong, then above here would allow a run towards 1.0675/80and eventually on to 1.0700 and above. Look for another choppy session, probably confined to 1.05.1.0600 but with a mild downside bias,” Jim added.