EUR/USD plummets to fresh one-week lows, around 1.1970 level
• A strong USD recovery prompts long-unwinding trade.
• A bearish break below 1.20 mark aggravated the downfall.
The EUR/USD pair remained heavily offered and slipped farther below the key 1.20 psychological mark to hit fresh one-week lows during the early NA session.
Currently trading around the 1.1975-70 region, the pair has now retreated around 80-pips from session tops and was being weighed down by resurgent US Dollar demand, despite Friday's downbeat US headline NFP print.
Growing market expectations that the Fed might stick to its plan for raising interest rates in March pushed the greenback higher across the board and remained one of the key factors weighing heavily on the major.
Meanwhile, the pair attempted rebound during the mid-European session got sold into near the 1.2010 level, with long-unwinding pressure turning out to be an exclusive driver of the pair's sharp retracement at the start of a new week.
Valeria Bednarik, American Chief Analyst at FXStreet writes, "from a technical point of view, the pair is poised to extend its decline short-term, as in the 4 hours chart, the price accelerated lower once breaking below its 20 SMA, now gaining bearish traction around 1.2035. In the same chart, indicators head south within negative territory, supporting the ongoing bearish correction."
In absence of any major market moving economic release, a follow-through weakness, led by a further lightening of the bullish positions, now looks a distinct possibility.
Technical outlook
Valeria further adds: "Still, the current decline remains as corrective as the pair is some pips below the 23.6% retracement of the previous three-week rally, at 1.2005. The 38.2% retracement of the same advance comes at 1.1955, now a probable bearish target, should the current slide continues. Below the level, 1.1920 comes next, being this last, a line in the sand for bulls. Above 1.2005, on the other hand, intraday resistances come at 1.2030 and the 1.2065 price zone."