EUR/USD reverses sharply and droops toward 1.1200

EUR/USD reversed sharply and is now moving toward 1.1200. It bottomed recently at 1.1213, the lowest since August 16, after falling more than a hundred pips from daily highs.

The initial reaction of the EUR/USD to Janet Yellen speech in Jackson Hole was a spike higher to 1.1340 but then it turned to the downside easing gains. Recently US dollar accelerated the rally in the market and pushed the pair further to the downside.

Federal Reserve’s Fischer helped the US dollar by stating that Yellen’s comments are consistent with a rate hike in September. A new signal pointing toward a rate hike boosted the US dollar in the market, pushed bond yields to the upside, and stocks to the downside. The Dow Jones is falling 0.35% but reached the lowest in three weeks.

EUR/USD levels to watch

To the downside, support levels could be located at 1.1215 (daily low), 1.1200 (psychological) and 1.1150 (Aug 15 low). On the opposite direction, resistance could be seen at 1.1270 (Aug 22 low), 1.1285 (20-hour moving average), 1.1310  (Aug 24 high) and 1.1340 (daily high).