EUR/USD downside picking up pace, around 1.0540

EUR/USD keeps losing momentum on Thursday, giving away its initial gains and retreating to the 1.0540/35 band, or session lows.

EUR/USD down on USD pick up

The selling pressure around the pair has picked up further pace during the European morning, as USD-bulls seem to have left behind the post-FOMC weakness.

USD has been losing momentum since late on Wednesday despite the FOMC reiterated its intentions to tighten monetary conditions ‘fairly soon’, emphasizing once again the healthy US fundamentals. The US Dollar Index has quickly abandoned the area of session tops beyond 102.00 the figure in the wake of the FOMC minutes, although it found decent support near 101.20.

Furthermore, ECB’s P.Praet said conditions in the euro bloc have improved, adding that the region has to minimize the negative effects of Brexit, as the impact on trade and goods will be substantial. Additionally, J.Weidmann advocated for the central bank to start discussing the continuation of the expansive policy.

Earlier in the day, EUR found initial buying interest after French presidential candidate F.Bayou abandoned the race for president, giving candidate E.Macron extra chances to beat far-right candidate M.Le Pen.

Data wise, German Q4 GDP figures have matched estimates (0.4% QoQ, 1.2% Yoy) while Consumer Climate tracked by Gfk dropped to 10.0 for the month of March. Across the pond, the usual weekly report on the US labour market is due seconded by Chicago National Activity Index and the speech by Atlanta Fed D.Lockhart (he will retire end of month).

EUR/USD levels to watch

At the moment the pair is losing 0.06% at 1.0550 and a breach of 1.0498 (low Feb.22) would target 1.0452 (low Jan.11) en route to 1.0339 (2017 low Jan.3). On the upside, the next resistance lines up at 1.0593 (55-day sma) followed by 1.0682 (high Feb.16) and finally 1.0706 (38.2% Fibo of the November-January drop).