EUR / USD bounces slightly after falling to nine-day lows near 1.2060

He EUR/USD it collapsed during the European session and the beginning of the American one, yielding more than 100 pips until stopping at 1.2059, new nine-day low. In the last two hours, the pair has rebounded to the upside, managing to regain the 1.2090 / 95 region, but remaining very pressed down, still far from the daily highs at 1.2169.

Several reasons caused the euro to fall sharply. The first was the comment of the member of the Governing Council of the ECB, Klass Knot, which ensured that the central bank could decide to further reduce its rate below zero if that were necessary to keep the inflation target in sight. Later, Reuters reported that European Central Bank officials believed markets are underestimating the odds of a rate cut.

Added to all this was a certain aversion to risk due to the advance of the coronavirus and the bad data on requests for durable goods in the United States, which grew only 0.2% in the monthly reading for December, well below the increase of 0.9% expected .

With EUR / USD trading at the time of writing above 1.2093, losing 0.61% on the day, traders are turning their full attention to the Federal Reserve’s monetary policy decision, which will be released today at 19:00 GMT. Subsequently, the words of the Chairman of the Fed, Jerome Powell, will be followed closely by the markets.

EUR / USD levels

Of continuing to fall, the first support appears at 1.2053, floor of January 18. A break would point to 1.2000, and lower to the 1.1925 / 30 zone, where the lows of November 30 and December 1, 2020 are.

To the upside, the pair would need to rebound solidly above 1.2100 to head back towards 1.2176, the January 26 high. Higher up, the main resistance is at 1.2222, the top of January 13.