EUR/USD drops to fresh session lows below 1.11 on USD rally

The EUR/USD pair came under a renewed selling pressure in the NA session and dropped nearly 50-pips in the last hour as the greenback gathered strength on recent political developments from the United States. The pair touched its session low at 1.1076 and is now trading at 1.1080, down 0.7% on the day.

A video of former FBI Director James Comey's testimony on May 3 is thought to be the main reason behind the recent USD rally, where he claims that the President didn't tell him to stop investigations for political reasons, suggesting that there was no obstruction of justice. The US Dollar Index jumped to its daily highs at 97.97 in a quick manner before easing back a little. As of writing, the index was at 97.85, up 0.52% on the day.

Furthermore, recent hawkish comments from Cleveland Fed President Mester may have played a part in the increasing USD demand as well. Mester argued that delaying the rate hikes for too long would increase the risk of a recession.

Technical outlook

1.1200 (psychological level/Oct. 9 high) could be seen as the first hurdle for the pair ahead of 1.1280 (Sept. 26 high) and 1.1300 (psychological level/Nov. 9 high). To the downside, 1.1075 (session low) is the initial support ahead of 1.1015 (May 7 high) and 1.0950 (200-DMA).