EUR/USD - How long can bulls defend key 61.8% Fib support?

EUR/USD peeped below 1.0527 (61.8% Fibonacci retracement of 1.0341-1.0829) on Wednesday but ended the day at 1.0546. 

The pair suffered a double blow of rising Fed rate hike bets and heightened odds of Le Pen victory in French elections. 

Odds are stacked against EUR bulls

France’s center-right presidential candidate, François Fillon is not pulling out of the Presidential race despite being formally charged in a widening embezzlement investigation.
However, most analysts see a low probability of him making it past the first round on April 23 in France’s two-round election. This opens doors for a far right anti-Euro candidate of the National Front, Le Pen. 

Meanwhile, at the Fed even the most dovish policy makers see increased likelihood of a sooner-than-expected rate hike. In fact, March rate hike odds are well above 60%. An upbeat February payrolls and wage growth figures could strengthen the case for a rate move later this month. 

Consequently, defending the critical Fib level of 1.0527 is looking like an uphill task. The focus today is on the preliminary Eurozone CPI for February and weekly jobless claims release in the US. 

EUR/USD Technical Levels

The spot was last seen trading around 1.0540 levels. A daily close below 1.0527 (61.8% Fib) would open doors for a sell-off to 1.0454 (Jan 11 low), under which Jan 3 low of 1.0341 stands exposed. On the higher side, break above 1.0552 (session high) would expose the 10-DMA level of 1.0572. A violation there could yield a rally to 1.06 levels.