EUR/USD Accelerates Slide to 1.1400 Handle

EUR/USD Accelerates Slide to 1.1400 Handle

5 May 2016, 16:36
Roberto Jacobs

EUR/USD Accelerates Slide to 1.1400 Handle

In last one hour, the EUR/USD pair accelerated its fall and dropped to session low near 1.1400 handle, despite higher-than-expected weekly jobless claims data from the US.

Although the number of people applying for unemployment related benefits rose by 17,000 to 274,000, it still remained closed to a nearly 16-year low in late April. Today's number remain consistent with the underlying strength in the US labor market, which is likely to be supportive for the US Dollar as it increases the possibilities of a Fed rate hike, sooner rather than later.

The pair stretched its losing streak for third straight day, erasing over 200-pips of it's up-move from the recent peak of 1.1616 touched during the early part of the week. The pair has now dropped back to April month daily closing high level resistance.

The recent bout of US Dollar strength might continue to gain traction ahead of the closely watched monthly jobs report for April, slated for release on Friday.

Technical levels to watch

The pair now seems to be on a verge of a break-down, which would be confirmed if the pair convincingly breaks below 1.1400 handle. Weakness below 1.1400 level is likely to accelerate the fall towards an important support confluence near 1.1350 level, comprising of 20-day SMA and 23.6% Fibonacci retracement level of 1.0522-1.01616 sharp up-move. A decisive break through 1.1350 support now seems to open room for further corrective move in the near-term.

On the flip side, 1.1450-55 area now seems to act as immediate hurdle, which if cleared should make a move back towards 1.1500 handle. On a sustained strength above 1.1500 mark, the pair seems more likely to surpass 1.1550-50 intermediate resistance and headed towards reclaiming 1.1600 round figure mark.


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