EUR/USD drops further and heads for a test of 1.1050

• Euro looking weaker from a technical perspective against the US dollar. 
• Greenback rises across the board during the American session on the back of higher US yields. 

The EUR/USD pair continued to decline during the American session and bottomed at 1.1055, slightly above yesterday’s low. Earlier today the pair reached at 1.1095, the highest level in two weeks but then reversed. 

Still, the pair holds in a consolidation range, unable to recover 1.1100 but now closer to the lower limit that is seen at 1.1050. A break lower would likely increase the bearish pressure. Also, it is back below the 20-day moving average. On the upside, the euro needs to avoid a close under 1.1060 to retain some support while a break on top of 1.1100 would clear the way to further gains. 

The greenback gained momentum during the American session amid rising US yields. The 10-year climbed to 1.78%, rebounding from the two-week lows. The DXY is up, back at the 98.00 area.

“Today’s economic agenda was focused on the U.S. with mixed data. The Philadelphia Fed business outlook improved more than expected in November (10.4, cons. 6, previous 5.6), but last week’s initial jobless claims and existing home sales disappointed”, explained BBVA analysts.

Tomorrow data to be released includes preliminary Markit PMIs from the Eurozone and also the US. Trade developments continues to be a critical driver in market sentiment and headlines will be watched closely.