EUR/USD hits fresh session lows, around mid-1.1600s amid surging US bond yields

   •  A goodish USD rebound triggers the initial leg of intraday retracement slide.
   •  A sudden upsurge in the US bond yields added to the selling pressure.

The EUR/USD pair extended its retracement slide from an intraday high level of 1.1715 and dropped to fresh session lows, around mid-1.1600s in the last hour.

The pair continued with its struggle to make it through the 1.1720-30 heavy supply zone, with a goodish US Dollar rebound prompting some fresh selling since the early European session. A sudden fall in the British Pound, led by the latest Brexit headlines, helped the greenback to recover early lost ground to near seven-week lows and triggered the initial leg of retracement slide. 

The buck got an additional boost following to release of US current-account data, which showed deficit fell 17% in the second quarter to $101.5 billion, the lowest level in three years. Meanwhile, the disappointment from weaker than anticipated building permits data was largely offset by a larger than expected rise in housing starts. 

Adding to this, a sudden upsurge in the US Treasury bond yields remained supportive of the USD recovery move. In fact, the benchmark 10-year bond yields jumped back closer to levels last seen in May and turned out to be one of the key factors behind the pair's latest leg of decline over the past hour or so.

It would now be interesting to see if the pair is able to attract any fresh buying interest at lower levels or repeated failed attempts to decisively break through an important barrier adds to the ongoing long-unwinding/bearish pressure.

Technical levels to watch

A follow-through selling has the potential to continue dragging the pair further towards the 1.1620-10 support area, below which the pair seems all set to head back towards challenging the 1.1530-25 strong horizontal support.

On the flip side, the 1.1680 level now seems to act as an immediate resistance and any subsequent up-move beyond the 1.1700 handle might continue to confront some fresh supply/remain capped near the 1.1720-30 region.