EUR/USD drops below 1.09 on broad based USD strength

Bid tone around US dollar strengthened in Asia, pushing the EUR/USD pair to a session low of 1.0892 levels as investors anticipate super strong US Q3 GDP figure.

Focus on US data

Wednesday’s upbeat US trade deficit figure coupled with strong Markit services PMI report triggered speculation that the economy could grown at a faster rate in Q3 than expected earlier. Consequently, investors are snapping up S dollars in Asia.

The focus today is on the US durable goods report, which is expected to show corporate spending remained anemic in September. The bar of expectations is already very low, which leaves the door open for a positive surprise. Strong figure could further cement expectation of a blow out GDP figure on Friday.

EUR/USD Technical Levels

The spot was last seen trading just below 1.09 levels. The recovery from Oct 25 low of 1.0851 ran out of steam yesterday at 1.0947. Thus, a break above 1.0947 is essential to signal continuation of the recovery towards key resistance at 1.0964 (Oct 17 low) above which psychological hurdle of 1.10 could be put to test.
On the lower side, breach of 5-DMA of 1.0891 could result in a revisit to 1.0874 (previoud day’s low). Next major support is seen at 1.0851 (Oct 25 low) which if breached would signal the down trend from September 26 high of 1.1279 has resumed.