EUR/USD fell to its lowest bids since mid-December, testing the 1.0800 handle after European Central Bank (ECB) officials left the doors wide open for rate cuts much earlier than investors had previously anticipated. Europe delivers a round of Gross Domestic Product (GDP) figures on Tuesday, headlined by pan-European GDP growth for the fourth quarter at 10:00 GMT. The US Federal Reserve’s (Fed) latest rate call is slated for Wednesday, to be followed by a Federal Open Market Committee (FOMC) press conference half an hour after the Fed’s monetary policy statement.
Monday saw EUR/USD decline over eight-tenths of a percent peak-to-trough from Friday’s near-term peak at 1.0886, and the pair continues to waffle below the 200-hour Simple Moving Average (SMA) descending into 1.0870. Technical resistance has piled up in a familiar zone just below the 1.0900 handle, capping off intraday momentum to the top side and chaining EUR/USD into a defensive position as bids test old chart territory. Daily candlesticks show the way open for a bearish test into December’s swing lows near 1.0750 as price action churns into the low side of the 200-day SMA near 1.0850. The pair’s ongoing pattern of higher lows is set for a challenge if buyers aren’t able to prop the pair back up over the 50-day SMA near 1.0925.
