EUR/USD drops further toward the 1.1950 zone

EUR/USD remains under pressure amid a stronger US Dollar across the board. The pair broke below 1.1970 and fell to 1.1954, hitting the lowest since Thursday. 

The euro continues with the correction that started on Friday from 1.2091 (highest level since January 2015). It retreated more than a hundred pips so far. 

The dominant trend still points to the upside but the US dollar is correcting. The Dollar Index is rising 0.40% posting the first gain after falling during five consecutive days. So far the decline in EUR/USD looks like a normal correction. 

The recovery of the US dollar is being supported by rising US bond yields and gains in equity prices. In Wall Street, the Dow Jones is up 1.13% while the 10-year bond yield reached 2.12% after falling last week to 2.03%. 

US Dollar extends gains towards 92 amid upsurge in US T-bond yields

Technical levels 

If the pair drops further it would test an uptrend line from August lows that is located at 1.1940. A break lower could clear the way for an extension of the correction. Below support levels might lie at 1.1890 and 1.1820.

On the upside, resistance levels might lie at 1.2000 (20-hour moving average), 1.2025/30 (Sep 11 high) and 1.2055/60 (Sep 7 high).