EUR/USD eases to a session low of 1.0931

EUR/USD H1 04-05

Buyers attempted a topside move above 1.1000 towards the end of last week but fell short of a test of the 200-day moving average @ 1.1034 , and fell back to close below the 100-day moving average @ 1.1004 as well.

Since then, the more defensive risk mood is underpinning the dollar and the technical levels above are giving sellers an area to lean on to drive price lower today.

As we begin European trading, the greenback and yen are keeping firmer as we see EUR/USD ease to session lows of 1.0931 currently.

For now, price action is trending towards a potential test of the key hourly moving averages with the 100-hour MA (red line) nearby @ 1.0901.

Keep above that and the near-term bias in the pair remains more bullish. Break below and sellers will regain some control, and look to test the 50.0 retracement level @ 1.0872 as well as the 200-hour MA (blue line) @ 1.0858 next.

Fundamentally, the lack of coordinated fiscal response by European governments and the pseudo-ECB rate cut may add reason to be bearish on the euro.

However, the broader theme in the market matters more in my view. Right now, risk is on the defensive so that is benefiting the dollar. The big question is, will the optimism of economic reopening in the region outweigh that? Or is this the start of a major downtrend?

If the "bear market rally" is meeting its demise, EUR/USD may be in store for more downside pressure in the coming sessions. So, let's see.

For now, the technicals are still holding up so it is still too early to derive anything yet.