EUR/USD reverts to 1.0920 as European stocks drop

FXStreet (Mumbai) - Having tested 1.09 handle, the EUR/USD pair climbs back towards 1.0920 region, extending its choppy-trend into the European session.

EUR/USD clings to key support just ahead of 1.0900

Currently, EUR/USD trades almost unchanged at 1.0916, retreating from session lows struck at 1.0903, the confluence of 100-DMA and hourly 50-SMA. The main currency pair found fresh bids few pips ahead of 1.09 barrier and swung back higher on the back of deteriorating risk sentiment as the European traders sold-off risky assets such as the equities, tracking the overnight slump in the black gold. Germany’s DAX drops -0.90%, while the UK’s FTSE slides -0.46% and the pan-European benchmark, the Euro Stoxx 50 declines -0.57%.

However, the upside in the EUR/USD pair looks limited as the oil prices have embarked upon the recovery mode and looks to ease the risk-off on the European markets. Further, the US dollar remains better bid against its major competitors heading into crucial US ADP jobs report due later in the NY session. The ADP employment change is expected to show private sector jobs additions at 193,000 after 257,000 booked in Jan.

Meanwhile, markets now await the final services PMI from the Euro zone as well from Germany for further cues. While the Euro zone retail sales data may also provide some impetus to the major.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance is seen at 1.0950/51 (round number/ Jan 29 High). A break beyond the last, doors will open for a test of 1.0969/75 (Jan 28 High/ daily R2). On the flip side, the immediate support is placed at 1.0905/00 (100-DMA/ round number) below which 1.0874/70 (10-DMA / 1h 200-SMA) could be tested.