EUR/USD briefly falls below 1.0600

The US dollar continued to recover ground and briefly dragged EUR/USD below the 1.06 mark to set fresh daily lows during the American session.

EUR/USD fell quickly to a low of 1.0583 but managed to regain the 1.0600 levels almost as quickly. The dollar has been on corrective mode over the last sessions, taking a breather following last week’s impressive rally. However, divergent monetary policy prospects continue to keep EUR/USD upside limited.

On Monday, ECB President Mario Draghi said inflation however, still relies on monetary support and they remain committed to preserving very substantial degree of accommodation. On the other hand, bets of fiscal stimulus in the US after Trump’s victory, support the case for higher inflation and faster rate hikes.

EUR/USD technical levels

At time of writing, EUR/USD is trading at 1.0610, still 0.15% below its opening price, with next supports seen at 1.0568 (Nov 18 low), 1.0550 (Dec 2 2015 low) and 1.0500 (Dec 3 2015 low/psychological level).  On the flip side, short-term resistances could be found at 1.0648 (Nov 21 high), 1.0745 (Nov 17 high) and 1.0767 (10-day SMA).  

To learn more about this topic, check our video analysis:

EURUSD from Tip TV Productions on Vimeo.