“¢ Resurgent USD demand prompts some aggressive selling on Tuesday.
“¢ Draghi’s dovish comments further dent the already weaker sentiment.
“¢ Reaction to the US housing market data turned out to be rather muted.
The EUR/USD pair maintained its heavily offered tone through the early North-American session, albeit has managed to rebound few pips from three-week lows.
The pair failed to capitalize on early up-move to a three-day high level of 1.1645 and came under some renewed selling pressure, primarily on the back of resurgent USD demand.
Despite escalating US-China trade tensions and tumbling US Treasury bond yields, the US Dollar Index climbed back to multi-month tops, closer to the key 95.00 psychological mark, and was seen as one of the key factors exerting downward pressure.
The shared currency was further weighed down by dovish comments by the ECB President Mario Draghi, who reaffirmed that significant monetary accommodation was still needed and added that the central bank will be patient in determining the timing of the first rate hike.
The pair tumbled to an intraday low level of 1.1531 before rebounding back to mid-1.1500s and had a rather muted reaction the latest US housing market data.
Technical outlook
Valeria Bednarik, FXStreet’s own American Chief Analyst writes: “The pair’s 4-hour chart shows that the decline could continue, as an early attempt to recover ground was contained by selling interest around a sharply bearish 20 SMA, while technical indicators gyrated south, both now in bearish territory and with the RSI nearing oversold conditions. Below the mentioned daily low, the pair has room to extend its decline to the 1.1420 price zone, particularly if the negative sentiment extends during US trading hours.”
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