EUR/USD clocks fresh 3-year high in Asia

• Broad-based USD sell-off continues. 
• EUR/USD jumps to 1.2545.

The USD sell-off continues on fears of hard landing in the US. 

Having closed above 1.25 yesterday, the EUR/USD jumped to 1.2545 in Asia - the highest level since December 2014. The common currency is up 2.73 percent from the Feb. 9 low of 1.2207 and looks set to test the monthly 100-MA of 1.2549. 

The greenback continues to defy hardening of the treasury yields as investors believe Fed could respond more aggressively to rising price pressures, thus leading to a hard landing. 

Further, the narrative on the efficacy of the fiscal stimulus seems to have changed. Goldman Sachs believes the stimulus could lead to overheating of the economy. Also, there is a consensus that problem of twin deficits is set to worsen. 

So, the American dollar finds no takers. Ahead in the day, the greenback will likely remain on the back foot, although oversold conditions may put a temporary floor under the greenback. 

EUR/USD Technical Levels

A break above 1.2549 (monthly 100-MA) would open doors for 1.26 (psychological hurdle) and 1.2624 (January 2012 low). On the other hand, a failure to hold above 1.2517 (38.2% Fib R of July 2008 high - Jan 2017 low) could yield a pullback to 1.2426 (5-day MA) and 1.24 (psychological level).