EUR/USD: Bears eye a break below 1.0600 amid risk-on

The EUR/USD pair is on a declining trend ever since it faced rejection at 1.08 handle, and now extends its selling spiral into a third consecutive session.

EUR/USD sold-off just below 1.0650

Currently, the spot drops -0.20% to 1.0619, meandering near session lows of 1.0612 reached last hours. The euro stalled a minor-recovery and came under renewed selling pressure on Asia open, as the treasury yields remained firmer across the time horizon amid risk-on market profile, boosting the USD demand versus its six major peers.

Dollar index snapped a four-week drop - BBH

Risk sentiment remained underpinned after Trump backed one China policy on Friday, while a peaceful conclusion to the meeting held between the US president Trump and Japan’s PM Abe, which calmed fears of any trade war, also further fuelled the risk-on trades.

While last week’s Trump’s calls for tax cuts in near future, continued to accelerate the upside in the greenback across the board. Looking ahead, we have an eventful week in stored, with the US CPI and Fed Chair Yellen’s testimony likely to emerge main market drivers.

In the meantime, the major will continue to remain at the mercy of Trumponomics-driven risk-trends and USD dynamics.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0646 (5-DMA). A break beyond the last, doors will open for a test of 1.0683 (100-DMA) and from there to 1.0700 (10-DMA). On the flip side, the immediate support is placed at 1.0608/02 (4-week low/ 50-DMA) below which 1.0587 (Jan 19 low) and 1.0550 (psychological levels) could be tested.