EUR/USD accelerates the downside to 1.0640

The selling pressure around the European currency remains unabated so far this week, now dragging EUR/USD to fresh daily troughs in the 1.0640 region.

EUR/USD weaker, USD picks up

It seems the greenback has resumed its recent upside following the opening bell in the Old Continent today, leaving behind the steady trade that prevailed during the Asian session and sending the US Dollar Index (DXY) to the upper bound of the range.

In the meantime, spot is extending the recent breakdown of the short-term support line around the 1.0700 area, opening the door for a test of late-January lows near 1.0620 and the 55-day sma in the 1.0600 neighbourhood.

Weakness around EUR has been exacerbated as of late after President Draghi emphasized the readiness of the Governing Council to increase the current asset purchase programme in size or duration. In the same line, Draghi minimized the recent up tick in the inflation in the region, noting that underlying upside pressures in consumer prices remain very subdued.

Absent releases in the euro area and the US calendar, the broader risk-appetite trends and USD dynamics remain poised to drive the sentiment in the markets in the near term.

EUR/USD levels to watch

At the moment the pair is losing 0.27% at 1.0650 facing the next support at 1.0617 (low Jan.30) followed by 1.0602 (55-day sma) and finally 1.0587 (low Jan.19). On the upside, a breakout of 1.0704 (20-day sma) would target 1.0706 (38.2% Fibo of November-January drop) en route to 1.0775 (high Jan.24).