EUR/USD: dollar gathers pace on risk aversion, but gains seen limited

6 febrero 2017, 17:17
araceli mendoza ramirez

The American dollar trades marginally higher across the board, gathering pace in the European morning after falling within Asian trading hours. The common currency is among the worst performers this Monday, with the EUR/USD pair down to the current  1.0730 region ahead of Wall Street's opening, despite data coming from the region was better-than-expected. The Sentix Investor Confidence Index for February, came in at 17.4, matching market's expectations, but below previous 18.2. In Germany, Factory Orders rose by 5.2% in December, from a previously revised -3.6%. Still pending of release is the US Labor Market Conditions Index.

The EUR/USD pair trades around 1.0720,  pressuring its daily low and technically bearish according to intraday charts, as in the 1 hour one, the price is now below its 20 and 100 SMAs, whilst technical indicators head south within negative territory, entering oversold levels. In the 4 hours chart, technical indicators have accelerated their declines within negative territory, whilst the 20 SMA gains downward slope above the current level. In the same chart, the 100 SMA stands in the 1.0710 region, alongside with the 38.2% retracement of its November/January slump, with a break below it opening doors for a continued decline towards the 1.0650/60 region.

Support levels: 1.0710 1.0660 1.0620

Resistance levels: 1.0760 1.0800 1.0840

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