EUR/USD selling pressure intensifies, hits fresh multi-year low

After a brief pause on Friday, the EUR/USD pair resumed with its downward trajectory and has now dropped to fresh multi-year lows.

Currently trading around 1.0360 region, the pair came under renewed selling pressure and closely tracked resurgent greenback buying interest, as depicted by the overall US Dollar Index. In fact, the gauge measuring greenback’s strength against a basket of currencies is fast approaching last week's nearly 14-year high touched after FOMC decision and hawkish outlook for 2017.

Moreover, possibilities of long unwinding pressure, once the pair failed to recovery back above 1.0400 handle, might have also contributed to the pair's latest leg of sharp slide to its lowest level since Jan. 2003.

In absence of any economic releases from the US, the broader (bullish) sentiment surrounding the greenback would continue to be sole driver for the pair's movement on Tuesday.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "From a technical point of view, the 4 hours chart shows that a bearish 20 SMA continues capping the upside, now around 1.0430, while the Momentum indicator extends its decline within negative territory, after failing to surpass its 100 level. In the same chart, the RSI indicator also turned lower, currently around 33. Should the price extend below 1.0360, the decline may extend down to 1.0320, en route to the 1.0270/80 region."

"Above 1.0420 on the other hand the pair can correct higher, with the next resistances at 1.0460 and 1.0500."