EUR/USD flirting with lows just below mid-1.1300s

The EUR/USD pair remained under some selling pressure for the third consecutive day on Tuesday and is currently placed at multi-day lows near the 1.1335-45 band.

The pair extended its retracement from fresh yearly tops near mid-1.1400s touched last week, particularly after hawkish remarks by the ECB President Mario Draghi. Although ECB clarified that Draghi's comments were broadly misinterpreted, the market seemed convinced that the central bank was eventually preparing to scale back its massive stimulus measures and lifted the pair to its highest level since May 2016.

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The pair, however, lost its upside momentum since last Friday as the recent upsurge in the US Treasury bond yields extended some support to the US Dollar and prompted traders to take some profits off the table. 

Tuesday's slide was also led by a follow through greenback buying interest but could also be attributed to today's weaker-than-expected release of Euro-zone PPI, coming in at -0.4% m/m for May as compared to -0.2% expected. 

Meanwhile, the latest leg of slide over the past hour or so seems to have been driven by dovish comments by ECB's Chief Economist Peter Praet, who was noted saying that inflation outlook was contingent on easy financing conditions.

   •  ECB's Praet: Metrics of underlying price pressures continue to be subdued

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The movement remains corrective long term, but in the short term, the risk is towards the downside as the price develops below a now bearish 20 SMA, whilst the RSI indicator continues heading south, now at 42, a fresh 2-week low. In the same chart, the Momentum indicator hovers within bearish territory, in line with the ongoing trend but without directional strength, reflecting the ongoing absence of volume amid US holiday."