EUR/USD stretches losses below 1.18 on upbeat US data
|The EUR/USD pair broke below the 1.18 handle in the early American trading hours and refreshed its daily low at 1.1780. As of writing, the pair was trading at 1.1786, down 0.55%, or 65 pips, on the day.
The renewed selling pressure seen on the pair seems to be a product of an increasing demand for the buck. Following its sharp rise on the back of the US Senate's 2018 fiscal year budget approval in the Asian session, the US Dollar Index remained quiet in the 93.30/40 region during the first half of the day before gathering some bullish momentum in the last hour.
The data released by the National Association of Realtors showed that existing home sales rebounded in September after three straight months of contractions. "Total existing-home sales rose 0.7 percent to a seasonally adjusted annual rate of 5.39 million in September from 5.35 million in August," the NAR reported. Although this data is generally ignored by the market participants, the fact that the economic calendar didn't feature any other data from the U.S. allowed for a modest reaction. The DXY advanced to a two-day high at 93.56 and was last seen at 93.50, gaining 0.52% on the day.
Later in the session at 18 GMT, Cleveland Fed President Loretta Mester is going to be delivering a speech, which could be the last catalyst before the markets warp up the week.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet, writes, "...the 4 hours chart shows that the price continues hovering around the 38.2% retracement of its latest bullish run, and between the 100 and 200 moving averages, while the Momentum indicator has lost its bearish strength, now aiming to regain the upside within positive territory as the RSI turned flat around 50, offering a short-term neutral stance. The immediate support comes at 1.1770, the 50% retracement of the same rally, and where it bottomed on Thursday, being the level to break to confirm a new leg lower, targeting then the 1.1720/30 region. The 1.1820/30 price zone, on the other hand, is the immediate resistance, followed by the 1.1860 price zone."
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