The EUR/USD is down sharply, with losses accelerating in the New York session as the European Central Bank’s policymaker Yannis Stournaras has called on the ECB to accelerate the purchases made within the scope of the bank’s Pandemic Emergency Purchase Programme (PEPP).
According to Reuters, Stournaras says that there is no fundamental justification for tightening nominal bond yield at the long end. Stournaras is also calling on the ECB’s Governing Council to take measures to fight the “unwarranted tightening” of financing conditions.
These comments come on the back of recent comments by the ECB Chair Christine Lagarde on watching the evolution of bond yields in the markets. Acceleration of asset purchases under the PEPP is considered bearish for the single currency, which explains the heightened offering of the Euro presently.
Technical Outlook for EUR/USD
The active candle has recorded a steep 0.68% drop, putting the 1.20890 support level at risk. A breakdown of that support level, as well as the ascending support trendline, allows bears to target the 1.19999 support level. Additional support could come in at 1.19472 if the decline is extensive.
On the other hand, a bounce at the current support levels allows bulls to aim 1.21685, with additional resistance barriers at 1.22420 and 1.22661.
EUR/USD Daily Chart