- EUR/USD meets with some fresh supply and dropped to weekly lows.
- Some follow-through USD strength was seen exerting some pressure.
The EUR/USD pair continued losing ground through the mid-European session on Wednesday and refreshed weekly lows, around the 1.1120 region in the last hour.
Having failed to find acceptance above the very important 200-day SMA, the pair came under some selling pressure on Wednesday and has now retreated over 50 pips from the previous session’s swing high, around the 1.1175 region.
Weighed down by stronger USD
The US dollar gained some follow-through traction on Wednesday, despite a weaker tone surrounding the US Treasury bond yields, and turned out to be one of the key factors that kept exerting some downward pressure on the major.
The greenback remained well supported by Tuesday’s upbeat data and hawkish comments by Dallas Fed President Robert Kaplan, reiterating that interest rates will be kept on hold unless there is a turnaround in the US economic outlook.
Meanwhile, bullish traders seemed rather unimpressed, rather shrugged off Wednesday’s strong-than-expected release of the German IFO Business Climate Index, which climbed to 96.3 for December as against 95.0 in the previous month.
Even the final Eurozone CPI figures, which confirmed a modest pickup in November, also did little to lend any support to the shared currency or stall the pair’s intraday slide, with bears now eyeing a move towards testing the 1.1100 handle.
In absence of any major market-moving economic releases from the US, market participants are likely to take cues from a scheduled speech by Chicago Fed President Charles Evans in order to grab some short-term trading opportunities.
Technical levels to watch
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