EUR/USD battles 50-day SMA; 1.0820 or parity?
Currently, EUR/USD is trading at 1.0603, down -0.38% on the day, having posted a daily high at 1.0636 and low at 1.0580.
The shared currency keeps fighting a one-to-one battle against the core named; parity. The euro price action, suggests further gains above 1.0600 level may be available, but limited. There is no way to deny, dollar weakness has been the key to success to most troubled US pairs.
On the other hand, the US docket had nothing to add due to Martin Luther King's federal holiday which created an organic pause in any dollar strength.
Europe's greatest creation; Not so much in the execution
Euronews reports on this matter, "The economic divide between European Union nations risks destroying the euro, Pierre Moscovici has warned. The European Commissioner for Economic and Financial affairs said that despite the benefits brought by low and stable interest rates, the common currency has not produced sufficient convergence across its 19 members."
EUR/USD a test of 1.0820 is not ruled out – Commerzbank
The report noted on Moscovici's views, “If the [economic] divergence continues to grow, the dismantling of the euro could become a fashionable idea, even a reality,” the former French economics minister said in an interview with Ouest-France. “The euro is a powerful historic development, but it will be fragile if it is not capable of creating convergence.”
EUR/USD Levels to consider
Valeria Bednarik, Chief Analyst at FXStreet, notes, "The EUR/USD pair fell in the European session down to 1.0578, as the dollar's benefited from Pound's sell-off, with the pair stabilizing afterward around 1.0600. Technically, the pair presents a modest bearish potential in the short term, as in the 1-hour chart, the price is now below its 20 and 100 SMAs, with the largest attracting intraday selling interest, whilst indicators hold within the negative territory, although with no directional strength. A key support comes at 1.0565, the 23.6% retracement of the latest monthly slide, and it will take a break below it to confirm another leg lower later today. In the 4 hours chart, the price broke below a still bullish 20 SMA, whilst the Momentum indicator heads sharply lower within the bearish territory, and the RSI hovers around 48, also indicating some further slides ahead."
To expand Valeria's analysis, there is technical evidence to expect fresh euro-long activity as soon as prices close and open above its 50-day SMA. Then, relevant upside barriers are aligned at 1.0820 (near 100-SMA) and 1.0985 (not too far 200-SMA). The downside levels to consider at 1.0450 (Jan. 11 low) and later, 1.0380 (Jan. 4 low).
Europe in search of direction