EUR/USD hits fresh 8-month lows as USD strengthens

EUR/USD is currently trading below the 1.0850 area, that is an important level. The pair hit at 1.0837, a fresh 8-month low and remains under pressure as the US dollar holds strong in the market. 

Greenback extended gains across the board during the last hour while gold prices tumbled and as equity prices in Wall Street turned negative. The common currency is underperforming in the market. 

To test 1.0820?

The euro is falling for the fifth day in a row against the US dollar and is about to post the lowest daily (and weekly) close since January. If EUR/USD consolidates below 1.0850, a test of 1.0820 (March lows) seems likely; below here, 1.0800 would be exposed. The next medium-term support could be seen around the 1.0700 area (2016 lows). 

In order to recover some strength, EUR/USD needs to rise back and hold above 1.0850. On a wider perspective the euro could gain momentum, if it recovers above the 1.0950/60 area, where the 20-day moving average stands. 

Worst week of 2016

The pair is trading almost 300 pips below the level it had a week ago. So far it is the worst result of the year for a week. From Wednesday’s highs, it has fallen 450 pips, making a dramatic reversal.