EUR/USD resumes declines below 1.1350, 1.1300 back on sight

After consolidating briefly around 1.1370 levels, the EUR/USD pair ran into fresh offers and broke to the downside, refreshing daily lows near the mid-point of 1.13 handle.

EUR/USD eyes 10-DMA at 1.1330

The main currency pair reversed entire overnight recovery mode and breached yesterday’s low of 1.1355, as the bears extend the corrective slide for the third straight session.

A renewed bout of buying interest seen behind the US dollar against its main competitors, as we head into earl Europe, is seen driving the latest declines in EUR/USD. The USD index wipes-out losses in a bid to regain 96 handle, reversing a dip to near 95.80 levels.

The ongoing recovery in the US dollar from multi-month troughs gained further traction yesterday, after the US ISM manufacturing PMI surprised to the upside and bolstered Fed rate hike expectations.

Meanwhile, latest report of some of the ECB policymakers growing cautious about lifting the easing bias, in response to the market reaction to last week’s Draghi's speech, also collaborated to weakness in the common currency.

Looking ahead, the spot will remain vulnerable as holiday-thinned light trading could exaggerate the USD price-action.

EUR/USD Technical Levels

According to Jim Langlands at FX Charts: “Expect a quiet session ahead.  Back below 1.1350 could see a slide to 1.1300, possibly to 1.1280, but buying dips still seems to be the plan given the positive look of the longer term momentum indicators. On the topside, a break of 1.1445/50 would target the May 2016 high of 1.1616 although this seems rather unlikely today.  Look for 1.13/1.14 to contain it today.”