EUR/USD has dropped to around 1.22 after ECB President Lagarde reaffirmed that accommodative policies will remain necessary for months to come, putting some pressure on the shared currency despite upbeat local data.
EUR/USD held 1.2170-80 (prior resistance now support), which while being an encouraging sign for Euro bulls. The February peak at 1.2240 has proved to be a tough area to crack. In turn, with EU PMIs failing to provide the impetus for a topside break, investors may look to unwind positioning, putting the focus back on 1.2170-80 which coincides with 38.2% fibonacci retracement level. Should this area fail to hold, a move to the low 1.21s can be expected.
As mentioned earlier, 1.2240 is the critical level to watch. Apart from the two recent attempts, it held EUR/USD down in February. Further above, 1.2280 and 1.2350 await the pair. Some support is at 1.22, followed by 1.2180 and 1.2150.
