EUR/USD at fresh one-year low, eyes sub-1.06 levels

The common currency continues to slide with the EUR/USD pair trading at a fresh one-year low of 1.0603 and threatening to drop below the psychological level of 1.06.

Fed Dec rate hike bets rise to 98%

The December Fed rate hike probability as represented by the CME Fed funds futures rose to 98% following the strong US CPI, weekly jobless claims and housing data release and hawkish comments from Fed’s Yellen on Thursday.

Consequently, the Asian desks continue to snap up the US dollars in anticipation the US rates could rise faster than previously expected, especially in the wake of a possible fiscal stimulus during the Trump Presidency.

Meanwhile, a realization has dawned on EUR traders that there is a significant political risk (elections in Italy, France, and Germany) for the Eurozone over the next one year.

EUR/USD Technical Levels

Breach of the psychological support of 1.06 would expose December 2015 low of 1.0517, under which the spot could test March 2015 low of 1.0463. On the higher side, the 5-DMA level of 1.0677 could offer resistance, above which 1.0693 (hourly 50-MA) and 1.0726 (hourly 100-MA) could come into play.