EUR/USD tumbles to lows near 1.0660

EUR/USD has quickly dropped to fresh daily lows in the 1.0660 area in response to an acceleration in the demand for the US Dollar.

EUR/USD weaker on USD-buying

Spot has come under renewed and strong selling pressure early in Europe today, breaking below the short-term support line and the Fibo retracement around the 1.0700 handle.

The greenback has intensified its correction higher following last week’s sharp sell-off, prompting the ongoing correction in the risk-associated space and eyeing the critical 101.00 barrier when gauged by the US Dollar Index (DXY).

EUR is adding to yesterday’s losses, always with the USD-dynamics as the exclusive driver of the price action although Monday’s speech by President Draghi sounded somewhat more dovish than expected. Draghi reiterated that the Governing Council is ready to increase the current QE programme both in size and duration, while he once again talked down the recent pick up in inflation figures, saying it was largely driven by energy prices.

Data wise in Euroland, German Industrial Production has contracted at a monthly 3.0% during December, reverting the previous 0.5% expansion. Across the pond, December’s Trade Balance figures are due seconded by JOLTs Job Openings.

EUR/USD levels to watch

The pair is now losing 0.72% at 1.0671 and a break below 1.0617 (low Jan.30) would target 1.0601 (55-day sma) en route to 1.0566 (23.6% Fibo of November-January decline). On the upside, the initial hurdle sits at 1.0745 (high Feb.7) followed by 1.0781 (100-day sma) and finally 1.0829 (high Feb.2).