EUR/USD hits fresh lows under 1.0580

The US dollar gained momentum during the American session and climbed across the board. It erased losses against commodity currencies and rose modestly versus its European rivals. 

EUR/USD moved away from 1.0600 and dropped to test daily lows slight below 1.0580. Overall, price action continues to be limited in the market in a quiet session ahead of Thursday’s ECB meeting and Friday’s NFP. Next week, will be the turn of the Federal Reserve decision. 

ECB first, then FOMC

“This Thursday, the ECB will deliver its rates decision with many expecting them to remain unchanged. However, we expect to see several announcements regarding monetary policy”, said Yann Quelenn, market analyst at Swissquote Bank. According to him, political uncertainties should remain at the center of attention at the meeting, “and it is clear that further developments from the French and Dutch elections will prevent the ECB from making changes to this year’s monetary policy.”

Regarding the US, traders are getting ready for the US official employment report to be released on Friday and next Wednesday (Mar 15) the FOMC will announce its decision on interest rate. A not negative report on Friday, could keep expectations of a rate hike elevated. Today the factory orders report showed a gain of 1.2% in January in the US, the number was in line with expectations and had little market impact. 

Technical levels 

Currently, EUR/SUD is trading at 1.0578 and is again testing daily lows. The pair weakened after being unable to hold above 1.0600. It peaked earlier at 1.0639,  the highest in two weeks. 

To the downside immediate support is seen at 1.0570/65 (Feb 28 low), followed by 1.0545 and 1.0494 (Mar 2 low). To the upside, resistance levels might be located at 1.0595 (20-hour moving average), 1.0640 (daily high) and 1.0675 (Feb 16 high).