It's been a rough one for EUR/USD this week after having seen the poor euro area PMI data readings and then the ugly reversal in risk sentiment yesterday - which led to a bid in the dollar. The pair is now tracking below 1.0800 and more importantly, eyes a break of the 200-day moving average (blue line) at 1.0802 on the day.
If sellers can keep this up, a firm break below the key level would turn the pair more bearish with the attention then turning to the May low at 1.0635 next.
The odds of a ECB rate hike have dwindled after the poor economic data readings on the week, going down from around ~65% to now ~48% instead. If Lagarde makes any slight mention of a pause later today, it will be enough for EUR/USD to take the pair to the cleaners and build on the latest downside break we're seeing.
At the same time, the downside push here is also helping to keep the dollar in a more solid spot overall. And if we are to see risk tones worsen again in US trading, any push lower in EUR/USD can be rather rapid so just be wary of that.