- EUR/USD drops further on the back of a stronger US dollar.
- Euro consolidates daily and weekly losses versus the greenback.
The EUR/USD pair reached a fresh weekly low late on Friday at 1.1332. It remains near the low on, consolidating important daily losses. From the level, it had a week ago, trades 80 pips below and it could post the lowest weekly close since June 2017 if it drops a few extra pips.
A stronger US dollar pushed the pair further to the downside during the American session. The DXY is testing the 97.00 area, trading at weekly highs, after opening the day around 96.50.
The move to the upside in the greenback takes place amid a sell-off in crude oil prices. The greenback receives support from risk aversion while the euro remains limited ahead of a key Brexit weekend and also amid the ongoing tensions between Italy and the European Commission regarding the budget.
EUR/USD Technical outlook
“The weekly chart for the pair shows that it ´s battling with the 50% retracement of the mentioned rally, and the weekly chart shows that, while it holds above the 200 SMA, the 20 SMA is crossing below the 100 SMA some 200 pips above the current level. Technical indicators remain within negative ground, the Momentum retreating just modestly from its mid-line, but the RSI hovering near oversold readings, skewing the risk to the downside”, says Valeria Bednarik, Chief Analyst at FXStreet.
According to her, the daily chart also supports a bearish extension as EUR/USD stands below its 20-DMA after spending most of the week above it, still well below bearish 100 and 200 SMA, and with technical indicators accelerating their declines within negative levels. She places the immediate support at 1.1310, the 61.8% retracement of the rally and below, the yearly low at 1.1215.
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