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EUR/USD bulls should be worried after an unimpressive reaction to the resolution of the Italian government crisis, which was followed by a dollar-positive U.S. jobs report. EUR/USD failed in two attempts to hold above 1.1700 after the Italian government news hit.
That disappointment was followed by a strong U.S. nonfarm payrolls report that increased the dollar's yield advantage over the euro. The data bolstered the view that the Fed can continue its rate-hike campaign, which will maintain the eurozone-U.S.
yield differentials that favor the greenback.
Technicals currently confirm the downside risks for EUR/USD.
The pair closed May below the 38.2 Fib of 1.0340-1.2556, RSIs are biased down, the 10-DSMA has helped cap recent rallies and long upper wicks are in place on recent daily candles.
A break of immediate support near 1.1640 would put May's 1.1510 low in play.
A break of that support could lead to a mass exodus of longs and make 1.1000/1.1100 a target.
chart: Click here