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  • EUR/USD loses the grip further to 1.1870/65.
  • The dollar advances beyond 92.00 to new tops.
  • German 10-year yields regain the -0.20% area.

The selling pressure around the European currency remains well in place and forces EUR/USD to give away extra ground to new 2-month lows in the 1.1870/65 band on Friday.

EUR/USD offered on dollar buying

The generalized selloff in the risk complex remains the name of the game following the hawkish shift from the Fed at its meeting earlier in the week.

In fact, the pair is already down more than 2% since Wednesday’s price action, shedding nearly 3 cents to fresh multi-week lows in the 1.1870 area.

The euro docket did not help the currency either, as minor publications were only on tap: German Producer Prices rose 1.5% MoM in May and 7.2% over the last twelve months. Additionally, the Current Account surplus in the broader bloc widened a tad to €31.4 billion in April.

What to look for around EUR

EUR/USD plummets to fresh levels below the 1.1900 mark on Friday, always in response to the strong improvement in the sentiment surrounding the greenback exclusively following the FOMC event on Wednesday. In the meantime, support for the European currency comes in the form of auspicious results from fundamentals in the bloc coupled with higher morale, prospects of a strong rebound in the economic activity and the investors’ appetite for riskier assets.

Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund. German elections. Investors’ shift to European equities.

EUR/USD levels to watch

So far, spot is losing 0.24% at 1.1876 and a breakdown of 1.1867 (monthly low Jun.18) would target 1.1835 (low Mar.9) and route to 1.1704 (2021 low Mar.31). On the flip side, the next hurdle comes in at 1.1991 (200-day SMA) followed by 1.2035 (100-day SMA) and finally 1.2064 (38.2% Fibo retracement of the November-January rally).