Today’s decline in EUR/USD has accelerated, as the dollar strengthens further ahead of President-elect Donald Trump’s 11:00 ET news conference. EUR/USD is currently down 0.92% at 1.0460, while the dollar is up 0.83% at 102.90.
The decline in EUR/USD has taken out support at Monday’s 1.0508 low, which represented a test of the January 2nd high. The 50% retracement level of the recent rebound has also been broken. The next level of potential support is at the 61.8% retracement at the 1.0444 level. Failing to hold this level would increase the probabilities of follow through to test the January 3rd low 1.0340.
The rally in the dollar, which has risen more than 8% from the November 2016 intraday low to the January intraday high, has been driven by the election of Trump, given his promises of spending and tax cuts. Today’s press conference is highly anticipated as he has yet to outline his policies in detail. It is open to question whether he will do so today.
Volatility could pick up further throughout the press conference. Should the dollar pare gains and EUR/USD rebound, resistance could come into play at 1.0500. The first level of clear resistance on the chart is at yesterday’s 1.0627 high.