EUR/USD tumbles below 1.0900, daily lows

The selling pressure remains well and sound around the shared currency, now dragging EUR/USD to fresh session lows in sub-1.0900 levels.

EUR/USD weaker on USD-buying

The persistent demand for the greenback has prompted the pair to break below the key 1.0900 support recorded in the wake of the ‘Brexit’ vote in late June.

In the meantime, the US Dollar Index has climbed to fresh multi-month levels in the mid-98.00s, always backed by rising expectations of a Fed move by year-end, with CME Group’s FedWatch tool now seeing the probability of a rate hike in December at nearly 70%.

In addition, there was no room for surprises at the ECB meeting yesterday, where the Governing Council did not discuss tapering its current QE programme, pouring cold water over some rumours that circulated in earlier weeks, while President Draghi insisted the ECB remains committed to preserve a ‘very substantial degree of accomodation’.

Nothing expected data wise in Euroland today, although all the looks will be upon the EU Leaders Summit, with migration, trade and Russia (and Brexit?) on top of the agenda.

Across the pond, speeches by D.Tarullo (permanent voter, hawkish) and San Francisco Fed J.Williams (2018 voter, neutral) are only due.

EUR/USD levels to watch

The pair is now losing 0.21% at 1.0905 and a breakdown of 1.0820 (low Mar.10) would target 1.0709 (2016 low Jan.5) en route to 1.0538 (low Dec.3 2015). On the flip side, the initial hurdle aligns at 1.0994 (2014-2016 resistance line) followed by 1.1041 (post-ECB spike Oct.20) and then 1.1070 (4-month resistance line).