EUR/USD hits three-week lows and tests the critical 1.0100 area amid a stronger dollar
- US Dollar rises across the board during the American session.
- EUR/USD under pressure, testing critical support.
- Break under 1.0100 could trigger a test of parity.
The EUR/USD dropped sharply during the American session and hit a low of 1.0107, the lowest level since July 27. It remains near the lows, under pressure amid a stronger US dollar across the board.
The greenback strengthened even as US yields remained steady and also as stocks in Wall Street sideways. The DXY is up 0.55%, at monthly highs near 107.30.
Regarding economic data, the weekly report showed Initial Jobless Claims declined to 250K, below market consensus; the Philly Fed jumped to 6.2 in August from -12.3, also surpassing expectations. On the negative front, Existing Home Sales tumbled to 4.81M, posting the sixth monthly decline in a row.
Short-term outlook
The EUR/USD is facing increasing bearish pressure and is near a critical support at 1.0110. A break below 1.0100 would expose the parity level, ending with weeks of a range. The bearish pressure in the short-term will likely persist while under 1.0135.
The euro needs to recover 1.0135 to avoid more losses. The next resistance stands at 1.0160 followed by the strong barrier near 1.0200.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
