EUR/USD drops to one-week lows, closer to 1.1700 handle

Haresh Menghani FXStreet

• German political turmoil continues to weigh.
• A modest USD uptick adds to downward pressure.

The EUR/USD pair retreated over 40-pips from session high level of 1.1758 and dropped to one-week lows during the early NA session on Tuesday.

The pair failed to build on early up-move and came under some renewed selling pressure as investors continue to assess the latest political woes in Germany, Euro-zone's largest economy.

Adding to this, Monday's dovish comments by the ECB President Mario Draghi further dented the already weaker sentiment around the shared currency and collaborated towards keeping a lid on any meaningful up-move for the major.

Meanwhile, a modest pickup in the US Dollar demand, despite uncertainty over the historic US tax reform plan, added to the downward pressure and dragged the pair to an intraday low level of 1.1713.

Traders now look forward to the release of existing home sales data from the US for some short-term opportunities in a relatively cautious trade/thin liquidity conditions on Tuesday.

Technical levels to watch

Bears would be eyeing for a convincing break through the 1.1700 handle, below which the pair is likely to accelerate the fall towards 1.1655 intermediate support en-route the 1.1600 handle.

On the flip side, the 1.1755-60 region now seems to have emerged as an immediate hurdle, which if cleared might trigger a short-covering bounce back towards the 1.1800 handle.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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