EUR/USD extends post-ECB slides, drops to nearly 4-month low

Having jumped to 4-day high level, the EUR/USD pair reversed sharply and dropped to the lowest level since the historic Brexit referendum amid uncertainty over ECB's bond purchase program. 

As the ECB presser got underway, the pair initially swung to an intraday high of 1.1039 after ECB President Mario Draghi said that the central bank's governing council did not discuss an extension of its quantitative easing program. 

The pair, however, reversed quickly as Draghi also said that there wasn't any discussions on tapering the QE program either, dashing hopes that the central bank might abruptly end its bond purchase program by the announced deadline of March 2017. 

The pair subsequently dropped to nearly 4-month low and is now heading back towards session low amid broad based US Dollar strength. 

Meanwhile, the pair ignored mixed US economic data showing better-than-expected reading for Philly Fed Manufacturing Index and existing home sales, and higher-than-expected jump in weekly jobless claims. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "The EUR/USD pair looks quite vulnerable intraday, as in the 1 hour chart, the spike was capped by a bearish 200 SMA, and that the price is now below all of its moving averages, whilst the technical indicators head sharply lower within negative territory. Furthermore, the pair seems unable to advance beyond 1.0950, July's low. In the 4 hours chart, the 20 SMA maintains its bearish slope above the current level, while the technical indicators also support a downward extension, heading south within negative territory. The immediate support is 1.0910, the post-Brexit low, with a break below it opening doors for a steeper decline towards the 1.0800/40 region."

"Support levels: 1.0910 1.0870 1.0840
Resistance levels:  1.0950 1.1000 1.1035"