EUR/USD: a further close below the 10 dma (1.0924) is highly bearish

Currently, EUR/USD is trading at 1.0865, down -0.09% on the day, having posted a daily high at 1.0899 and low at 1.0858.

EUR/USD hit a two-week low as the dollar picked up the pace yet again. DXY has recovered back towards the previous closing price of 99.65 after opening at 99.43, albeit still down -0.08%. The surprise failures over 1.1000 have left the euro exposed to the further downside following the Macron victory and the sell-the-fact trade.

• EUR/GBP: keeping an eye on 2016-17 resistance line at 0.8573 and UK politics around Brexit

The gap to the downside is 1.0788-1.0821 and could be filled in a trendless market environment with gravity taking over should the dollar continue its advance ahead of June's expected Fed rate hike and a continuation of improving US data leading into the FOMC next month. Other risks are in the UK snap election where a favourable run for PM May could lead to a slide in the euro in a zero sum game trade where EUR/GBP accelerates to the downside. However, given the Macron presidency, the ECB might be more inclined to start signalling to markets that they could be preparing to taper in due course, supporting the euro. 

EUR/USD levels

EUR/USD closed under the 10-day MA yesterday and that reinforces the bearish bias. Weakness to the 38.2% Fibo of the 1.0570-1.1025 rise is at 1.0851 and today's lows the next downside level at 1.0828 and 26th May low and 200dma. The 200 daily ema at 1.0788 is a target below the 1.08 handle. To the upside, 1.0924 and the 10-dma come ahead of the 1.0940 Tenken-Sen, 1.1024 is the 8th May high and 1.1073 is the 76.4% Fibo of 1.1300-1.0340.