EUR/USD rejected at 38.2% Fib, drops below 50% Fibo

EUR/USD failed at 1.1109 (38.2% of Friday’s drop) in the NY session and retreated to 1.1066 (50% of Dec low-May high).

Gains erased

At the time of writing, the pair traded with moderate losses below 1.1066. The greenback made a comeback in the NY session on the back of the upward revision of the US first quarter GDP. Consequently, the pair failed to take out Fibo hurdle of 1.1109.

Meanwhile, fresh sign of weakness in the GBP/USD pair in Asia is weighing over common currency, pushing it below 1.1066 levels. The pair remains at the mercy of the action in the GBP/USD pair and the political situation in Europe is likely to overshadow economic developments in the short-term. Later in the day, Us personal income and spending report could affect the demand for the US dollars.

EUR/USD Technical Levels

A break below 1.1066 (50% of Dec low-May high) has exposed support at 1.1033 (23.6% of Friday’s drop). A violation there would open up psychological support at 1.10. On the higher side, 1.1109 (38.2% of Friday’s drop) is a tough nut to crack. However, if breached, the resistance at 1.1131 (June 16 low) and 1.1170 (50% of Friday’s drop) could be put to test.