EUR/USD remains a sell on spikes

“The EUR/USD pair bounces from its lowest level in 12 years, having been so far as low as 1.0721, on the back of escalating concerns related to Greek debt woes.”

“The dollar's latest short term slide followed a headline coming from the US White House advisor, expressing concerns over dollar strength affecting economic growth.”

“Nevertheless, temporal bounces are seen as selling opportunities in the pair, already retreating from the high of the spike at 1.0780, now the immediate resistance.”

“Technically the 1 hour chart shows that the technical indicators are aiming to bounce from extreme oversold levels, albeit the pair develops well below a bearish 20 SMA.”

“In the 4 hours chart the technical indicators also head north, but remain in extreme oversold levels, as the RSI holds around 23.”

“Support levels: 1.0725 1.0690 1.0660”

“Resistance levels: 1.0780 1.0815 1.0850”

US stocks fall more than 1%

The Dow Jones Industrial Average dropped 219 points, or 1.2%, to 17,778. The S&P 500 index fell 23 points, or 1.1%, to 2,056, and the Nasdaq Composite lost 64 points, or 1.30%, to 4,878. 

Strong US nonfarm payrolls published last Friday fueled prospects the Fed could raise interest rates sometime mid-year, boosting the greenback across the board and weighing on stocks and commodities. 

The US dollar index reached an 11-year high of 98.50 while EUR/USD fell to its lowest level in 12 years at 1.0725 on Tuesday.

Meanwhile renewed concerns about Greece debt situation also depressed risk sentiment and stocks across the globe.

Forex - Aussie weakens after NAB survey, China prices data disappoints

The Australian dollar fell sharply on Tuesday as a business survey and price data from China disappointed on demand prospects.

Producer prices year-on-year for February fell 4.8%, more than the 4.3% decline expected. But consumer prices year-on-year for the same month rose 1.4%, faster than the 0.9% gain expected.

A mixed picture of inflation in February no doubt will fuel the debate over deflation and future rate cuts. CPI sharply beat market expectations and January's CPI could be the bottom of the current cycle. thereby easing pressure for the People's Bank of China to cut rates further.

The NAB February business conditions survey stayed at plus2 in February, while business confidence fell to zero from plus-3.

The fall in confidence is disappointing but not entirely surprising given news about the RBA cash-rate cut in February mostly talked of a weakening economy. This is in contrast to the RBA's admission it decided it was appropriate to provide additional support "not because things had turned for the worse but rather because of the lack of compelling signs that economic growth was picking up as was earlier expected."

AUD/USD traded at 0.7643, down 0.82%, while USD/JPY changed hands at 121.89, up 0.61% and EUR/USD fell 0.54% to 1.0794 as Greece talks continue.

Overnight, the dollar remained lower against a basket of other major currencies on Monday, holding just under a 11-1/2 year peak as investors locked in profits from Friday's rally sparked robust U.S. jobs data.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 98.15, up 0.54%.

Friday’s stronger-than-expected U.S. employment report solidified expectations that the Federal Reserve will raise interest rates around the middle of this year, boosting the dollar.

The euro remained under pressure as the eurogroup of euro zone finance ministers prepared to hold talks to discuss a reform package put forward by Greece as part of its bailout review.

Last month Athens reached a temporary agreement with its lenders to extend its bailout by four months, but the reform package must be signed off by creditors before it can access further financial aid.

Ahead of the talks eurogroup head Jeroen Dijsselbloem warned that Greece must stop wasting time and start developing its reform package.

Also Monday, the European Central Bank confirmed that it started asset purchases under its quantitative easing program.