EUR/USD drops back towards 1.1700 amid notable USD demand

Having faced rejection just ahead of 5-DMA at 1.1765 in early Asia, the EUR/USD pair extends its retreat below 1.1750 levels as we head into the early European trading.

EUR/USD trades below daily pivot at 1.1741

The bid tone around the US dollar keeps growing bigger against its main competitors, sending EUR/USD almost 40-pips lower from daily highs. The Euro appears to have lost its status as a safe-haven, as it fails to benefit from resurfacing risk-off trades amid escalating US-North Korea geopolitical tensions.

The greenback edges higher across the board amid renewed strength seen in Treasury yields, pushing the USD index to fresh daily highs of 93.58, up +0.17% on the day. Moreover, rising US inflation expectations further help keep the USD bulls in command, weighing negatively on EUR/USD.

In absence of significant economic drivers from the Euroland today, the major will closely track the USD dynamics until the releases of the US PPI and jobless claims data in the NA session.

EUR/USD Technical Set-up  

Karen Jones, Analysts at Commerzbank explains: “EUR/USD has eased back to its near term uptrend: The daily RSI has not confirmed the new high and Friday saw the start of a sell off. Nearby support is provided by the accelerated uptrend at 1.1689 and the 3 month uptrend at 1.1520 and while above here, there is scope for further gains. It is not clear currently how far this slide will extend, our suspicion is to the 1.1520 uptrend.”