EUR/USD breaks below 1.13 as 'risk on' Asia weighs

EUR/USD has broken through 1.13 support in Asia in response to improved risk appetite conditions, setting a new session low of 1.1290, nearing the lows of last Friday at 1.1284.

Risk appetite improves in Asia, EUR falls

The recovery in the risk environment, manly attributed to an unexpectedly strong Japanese Q1 GDP, has taken its toll in the European shared-currency, as the demand toward riskier assets increases.

Amid the current environment, we are seeing a surging Nikkei 225, which is being backed up by an aggressive sell-off in 30-year US Treasury and a reduction in the volatility index VIX. The next key event to inject two-way volatility in the pair will be Wed's FOMC minutes.

EUR/USD technicals

Earlier today, Valeria Bednarik, Chief Analyst at FXStreet, wrote: "The 4 hours chart for the pair suggests that the risk remains towards the downside, given that the intraday spike, stalled around the 38.2% retracement of the latest daily bearish run, and that the price is still unable to settle above a bearish 20 SMA although the technical indicators lack enough strength to confirm some directional move."

"FOMC Minutes to be released this Wednesday can shed some light over the US future, yet as long as above 1.1280, the downward risk of the pair will be limited", Valeria adds.