EUR/USD sits at one-month lows with the year's low of 1.1027 in focus
The brief rebound overnight from ECB's Knot's remarks failed to amount to anything much as sellers maintain near-term control and are driving price lower today. At current levels, EUR/USD is trading at lows last seen on 1 August.
As such, the downside level to look out for will be the year's low posted on that day around 1.1027. That will be a key spot to eye before sellers potentially find the conviction to challenge the 1.1000 handle.
For buyers, they have plenty of work to do in order to prevent the downside momentum from carrying on. The first step is to work towards a move back above 1.1052 and 1.1070. The key test will then be to break above the key hourly moving averages closer to 1.1090.
However, with little positive news to ride on, it is tough to see the euro rally ahead of the ECB meeting on 12 September.
If anything else, I reckon we could sit around these levels ahead of the ECB as layered bids and sit at the 1.1000 handle. If that gives way, expect stops to be quickly taken out as sellers will start to seize more control in the pair.
Looking at the big picture:
There is the key trendline support around 1.0960 upon a break of the 1.1000 level so that will be the next support level to eye in case we do observe a break of the big figure.
