EUR/USD drops to new 2021 lows near 1.1330, dollar extends gains

EUR/USD loses further momentum and tests 1.1330.
Flash EMU Q3 GDP came out at 2.2% QoQ, 3.7% YoY.
US headline Retail Sales surprised to the upside in October.

Pablo Piovano FXStreet

EUR/USD remains mired well into the negative territory and records fresh 2021 lows in the boundaries of 1.1330 on Tuesday.

EUR/USD risks further downside

EUR/USD's earlier bullish attempt ran out of steam past the 1.1380 level, and it has been all the way down since then. The bid bias in the buck remains sound and well and now pushes the US Dollar Index (DXY) to fresh cycle tops near 95.80 on the back of the continuation of the rebound in US yields.

Further sustaining momentum for the dollar, US headline Retail Sales surprised to the upside in October after expanded at a monthly 1.7%, while Core sales also rose above estimates of 1.7%. Further data for October saw Industrial Production expanding 1.6% and Capacity Utilization rising 76.4%.

Next on the docket will be the speech by ECB's Lagarde and US Business Inventories, the NAHB Index and TIC Flows.

EUR/USD levels to watch

So far, spot is down 0.31% at 1.1332 and faces the next upside barrier at 1.1498 (10-day SMA) followed by 1.1556 (20-day SMA) and finally 1.1609 (weekly high Nov.9). On the other hand, a break below 1.1329 (2021 low Nov.16) would target 1.1185 (monthly low Jul.1 2020) en route to 1.1168 (low Jun.19 2020).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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