- Summary:
- Month-end flows and rebalancing causes a slump in the EUR/USD, with 1.2000 identified as a potential downside target for the pair.
A combination of month-end flows and upbeat US data have caused a sudden slump in the EUR/USD within the last hour of trading.
As of the time of writing, the EUR/USD is down 0.69%. There have been no major fundamental drivers for this move, even though the slump in Germany’s preliminary GDP earlier in the day may have initiated bearish sentiment.
A rise in the Core Personal Consumption Expenditures (PCE) Price Index from 1.4% in February to 1.8% in March was enough to put some strength on the greenback, further accentuating weakness on the pair. The EUR/USD appears to be on course to end a 3-week winning streak.
Technical Levels to Watch For
The slump in the EUR/USD on the day follows the completed measured move from the falling wedge. The downside move has violated the 1.20549 support level, with price looks set to target the 1.19999 support level. A further decline targets the 1.19472 support, with 1.18927 serving as an additional target to the south.
On the other hand, the EUR/USD needs to breach the high at 1.21487 (11 February/29 April highs) to form a higher high that signals the continuation of the recovery move of April. This move would require that price takes a bounce from any of the support levels mentioned above.
Technical Levels to Watch For
The slump in the EUR/USD on the day follows the completed measured move from the falling wedge. The downside move has violated the 1.20549 support level, with price looks set to target the 1.19999 support level. A further decline targets the 1.19472 support, with 1.18927 serving as an additional target to the south.
On the other hand, the EUR/USD needs to breach the high at 1.21487 (11 February/29 April highs) to form a higher high that signals the continuation of the recovery move of April. This move would require that price takes a bounce from any of the support levels mentioned above.
EUR/USD Daily Chart
