EUR/USD: bears lining up January-February retracement objectives

Currently, EUR/USD is trading at 1.0681, down -0.07% on the day, having posted a daily high at 1.0690 and low at 1.0676.

Wall Street mixed in volatile US session with plenty going on

EUR/USD has been making a strong case for the downside with the DXY back above the 100 handle again after a volatile day overnight across the G10's. The US dollar has been for the most part higher against every major currency and virtually every EM currency as well. There have been a number data reports and comments that were supporting the case for a sell-off and Germany reported very weak December IP with the measure taking a dive by -3.0% m/m vs. +0.3% consensus in European trade overnight and Draghi also made some dovish comments yesterday regarding ECB policy. A resurgence in the greenback was the nail in the coffin and there has been a fade on correction higher from 1.0655 overnight lows to 1.0705 where offers and supply took the major back to 1.0676 aforementioned early Asian low.

EUR/USD levels

With spot at 1.0678, the ascending support line at 1.0650 has so far been holding up. A further attack at the 1.07 handle might find further offers at 1.0720. "Momentum signals are now bearish, DMI’s are providing confirmation, and further downside is expected as we look to the 50 day MA at 1.0601," noted analysts at Scotiabank. "Retracement objectives from the January-February rise come in near $1.0645 (38%), $1.0585 (50%), and $1.0525 (62%)," explained analysts at Brown Brothers Harriman.