The EUR/USD pair weakened sharply to 1.12 as it met with fresh offers above 1.13 after the ECB’s Coeure said that the bank may front-load its QE program before summer for seasonal reasons.
EUR weakens as bond Yields fall
The shared currency fell into losses as the benchmark bond yields across the Eurozone took a hit after Coeure said the ECB may buy more bonds in May, June for seasonal reasons. It means the bank may buy bonds more than its monthly target of EUR 60 billion.
The EUR took a hit on the “accelerated QE” and the talk of deposit rate falling further into the negative territory. The expectations of further cut into negative territory were triggered since Coeure said short-term rate below zero does not pose a policy problem.
EUR/USD Technical Levels
The pair currently trades at 1.1191. The immediate support is seen at 1.1178, under which the pair could extend the drop to 1.1130. On the flip side, a break above 1.12 could see the pair recover back to 1.1250 levels.