FXStreet (Mumbai) – The EUR/USD pair halted its recovery just shy of 1.06 handle and dropped sharply to fresh seven-month lows near 1.0560 region.
EUR/USD sell-off extends
Currently, the EUR/USD pair drops -0.25% to 1.0566, testing the lowest levels reached since April this year at 1.0563 last minutes. The main currency pair came under renewed selling pressure as markets favour the US currency, gearing up for the first Fed lift-off in more than nine years next month.
In response to markets’ anticipation of a Dec Fed rate hike, the shorter duration US treasury yields jumped to 5-1/2 year high in the European morning. The 2-year yields on the US notes spiked to 0.950, up 2.61% so far.
Moreover, the solid rebound posed by the European stocks also boosted investors’ appetite for risker currencies such as the US dollar. The USD index is now testing March highs posted at 100.38 and advances 0.30% on the day. Meanwhile, the German DAX rises 0.75% while the pan-European benchmark, the Euro Stoxx 600 gains 0.30%.
In the day ahead, markets will continue to monitor the sentiment on the European markets ahead of the German CPI and a set of US macro updates.
EUR/USD Technical Levels
The pair trades near multi-month lows, with the immediate support seen at 1.0519 (April Low). Selling pressure will intensify below the last, dragging the pair towards 1.0460 (March Low). While to the upside the next hurdle in sight is located at 1.0599 (5-DMA) and from there to 1.0616 (1h 100-SMA).
(Market News Provided by FXstreet)