EUR/USD extends decline to 1.0550

EUR/USD dropped further during the American session after the OPEC deal and following the release of US economic data. Greenback gained momentum across the board and extended gains, hitting muti-month highs versus the yen. 

Supported by 1.0550

The pair fell below Monday and Tuesday’s lows but quickly found support above the 1.0550 zone. Then it bounced to the upside and is was trading at 1.0585/90, down 50 pips for the day and still facing some bearish pressure as the US dollar consolidates gain in the market. 

A better-than-expected reading in the ADP employment report and income and spending data in the US, contributed to keep expectations elevated about a rate hike in December from the Federal Reserve. Also rising US bond yields helped the dollar. 

While the Fed points toward a rate hike, the European Central Bank is likely to announce next week an extension of its purchase program, increasing the differential between monetary policy in the US and the Eurozone. 

Still in the range

Despite falling more than a hundred pips from daily highs, EUR/USD continues to move sideways, around 1.0600. To the downside, the key support arises between 1.0520 and 1.0500, while to the upside, the 1.0650 area is the relevant resistance.