EUR/USD losing the grip, tests lows near 1.1240

The selling interest around the single currency has picked up pace on Wednesday and dragged EUR/USD to fresh lows in the boundaries of 1.1240.

EUR/USD offered ahead of the ECB

Choppy performance of the pair during the first half of the week, now looking to stabilize around 1.1250 with decent support emerging in the vicinity of 1.1200 and gains clearly running out of steam just below the critical barrier at 1.1300 the figure.

The persistent inability of spot to test/break above 1.1300 could spark some near term consolidation ahead of the key ECB meeting tomorrow, UK elections and the testimony by former FBI Director J.Comey before the Senate Intelligence Committee.

Risks of heightened volatility thus appear on the cards for EUR/USD in the next couple of sessions, while market participants will closely follow the ECB meeting and subsequent press conference by Mario Draghi looking for clues regarding a potential shift to a more hawkish wording in the statement, although this idea seems to have lost some momentum as of late, especially after inflation figures in the region came in lower-than-expected for the month of May.

In addition, EUR/GBP should be in centre stage tomorrow and Friday in light of the uncertainty gyrating around the UK elections. Recall that election polls keep showing Conservatives leading the vote intention albeit by a tight gap vs. Labour.

And finally, USD should stay under scrutiny in light of tomorrow’s testimony by J.Comey, which could hurt further the sentiment surrounding the Trump’s administration.

In the data space, EMU’s GDP figures for the first quarter are next on tap, with consensus expecting the economy to have expanded 0.5% QoQ and 1.7% on an annualized basis.

EUR/USD levels to watch

At the moment, the pair is losing 0.17% at 1.1259 facing the next support at 1.1202 (low Jun.1) followed by 1.1162 (20-day sma) and finally 1.1108 (low May 30). On the flip side, a breakout of 1.1284 (2017 high Jun.5) would target 1.1300 (high Nov.9 2016) en route to 1.1367 (high Aug.18 2016).