EUR / USD broke the key support around 1.2130, which quickly drew attention to a potential test of key support around 1.2060, according to Ned Rumpeltin, head of European currency strategy at TD Securities.
“We note that EUR / USD fell overnight as the news is dominated by the slow roll-out of the EU vaccination program and political issues in Italy have also gained airtime.
Interestingly, the pair now appears to be near weekly lows just above 1.2130. We have seen good support emerging around this pivot point since mid-December, so a clear break below would be a noticeable event.
We expect to see bids emerge around 1.2100 / 05, but our focus will quickly shift to spot behavior in case we manage to move down to the next key support at 1.2060. We also note that 1.2064 represents a 38.2% retracement in the trading range since early November lows. The 55-dma is hiding just below that level at 1.2044. “