EUR/USD testing fresh lows near 1.0770

The continuation of the buying pressure around the buck has prompted EUR/USD to test fresh multi-month lows near 1.0770.

EUR/USD weaker, dollar remains bid

The pair has intensified its bearish mood at the beginning of the week, breaking below the critical support zone around 1.0820 (March lows) and thus opening the door for a potential visit to YTD lows in the 1.0700 neighbourhood.

In the meantime, expectations of a Fed’s rate hike next month plus increasing optimism on the future presidency of D.Trump – particularly when comes to fiscal stimulus - have lifted the US Dollar Index to fresh 9-month tops well above the 99.00 mark, adding to the prospects of a deeper pullback in spot.

Nothing worth mentioning data wise in Euroland today, while President M.Draghi is due to speak later along with board members V.Constancio and P.Praet.

Across the pond, speeches by Dallas Fed R.Kaplan (2017 voter, neutral), Richmond Fed J.Lacker (2018 voter, hawkish) and San Francisco Fed J.Williams (2018 voter, neutral) should keep the attention on the dollar in an otherwise empty docket.

EUR/USD levels to watch

The pair is now retreating 0.76% at 1.0772 and a breakdown of 1.0709 (2016 low Jan.5) would target 1.0538 (low Dec.3 2015) en route to 1.0519 (low Apr.13 2015). On the upside, the immediate hurdle aligns at 1.0826 (high Nov.14) followed by 1.0848 (low Oct.25) and finally 1.0952 (20-day sma).