EUR/USD eyes key downside break as momentum looks to build

<p>It's been a rough one for EUR/USD this week after having seen the poor euro area PMI data readings and then the ugly reversal in risk sentiment yesterday – which led to a bid in the dollar. The pair is now tracking below 1.0800 and more importantly, eyes a break of the 200-day moving average (blue line) at 1.0802 on the day.</p><p>If sellers can keep this up, a firm break below the key level would turn the pair more bearish with the attention then turning to the May low at 1.0635 next.</p><p>The odds of a ECB rate hike have dwindled after the poor economic data readings on the week, going down from around ~65% to now ~48% instead. If Lagarde makes any slight mention of a pause later today, it will be enough for EUR/USD to take the pair to the cleaners and build on the latest downside break we're seeing.</p><p>At the same time, the downside push here is also helping to keep the dollar in a more solid spot overall. And if we are to see risk tones worsen again in US trading, any push lower in EUR/USD can be rather rapid so just be wary of that.</p>

This article was written by Justin Low at www.forexlive.com.