- EUR/USD turns down again on USD rally, German data comes in lower than expected.
- EUR bears regain control amid bearish technical pattern.
- The pair needs to reclaim 1.0650 convincingly to assert a reversal.
EUR/USD is targeting 1.0600, in a fresh sell-off in the forex market, as the US dollar tries to bounce back after the sell-off triggered by a less aggressive stance from the Fed.
The Fed dashed any hopes of a 75 basis point rate hike in June, crushing the dollar along with Treasury yields and allowing EUR/USD to make a solid recovery above the 1.0600 barrier.
The latest dovish comments from ECB Monetary Policymaker Fabio Panetta, combined with disappointing German factory orders data, contribute to the pair’s latest move lower. The EU embargo on Russian oil is also keeping EUR bulls at bay.
The focus now shifts to the BoE interest rate decision for any impact of the EUR/GBP cross on the common currency. Meanwhile, the US NFP release on Friday will be the next event risk for the pair.
As seen on the daily chart, EUR/USD’s immediate upside remains capped just below the Apr 27 high of 1.0654.
Breaking above this level is critical to trigger a further rally towards the downsloping 21-day moving average at 1.0725.
Before that, however, the round level of 1.0700 will have to be challenged.
EUR/USD daily chart
The recovery, however, appears to be short-lived as the 14-day RSI still lurks below the mid-line, currently pointing lower.
Immediate support for EUR/USD bulls lies at the May 3 high near 1.0588, below which the psychological level of 1.0550 will be at risk once again.
Further below, sellers are bracing for a further drop towards the key 1.0500 level.
EUR/USD additional levels
Source: Fx Street
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