EUR/USD drops to session low at 1.1015

The EUR/USD pair faded a modest bullish spike to 1.1040 and dropped into negative territory to currently trade at session low level near 1.1015 region.

During early European session, the pair cheered the release of a surprisingly stronger-than-expected services PMI print for the month of July. The sentiment got an additional boost from a slight upward revision to last month’s final print. Meanwhile, the manufacturing PMI numbers were mostly around expected level and showed expansion in manufacturing activity. 

However, the upbeat sentiment was short-lived and a fresh wave of US Dollar buying interest gripped the market, dragging the pair back close to 1.1000 key psychological support. 

Going forward, the shared currency might continue to be weighed down on prospects of additional monetary easing by the ECB. Adding to this, increasing probability of an imminent Fed rate-hike should also restrict any swift recovery for the EUR/USD major.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "the 4 hours chart shows that the price is currently recovering above a bearish 20 SMA, while the technical indicators head modestly higher within neutral territory. A daily descendant trend line coming from the pre-Brexit high of 1.1427 offers a strong resistance now at 1.1060, the level to beat to see the pair recovering further, towards the 1.1100 region. A downward acceleration below 1.1000 on the other hand, could see the pair extending its decline down to fresh weekly lows around 1.0960, en route to 1.0910."