EUR/USD dives to over 1-week lows, below 1.1100 handle ahead of US data

• EUR/USD extended overnight rejection slide from the very important 200-DMA.
• The USD regains traction amid surging US bond yields and exerted some pressure.
• Technical selling accelerates the downfall as the focus shifts to a slew of US data.

The selling pressure around the shared currency picked up some additional pace in the last hour and dragged the EUR/USD pair to over one-week lows, below the 1.1100 handle.

Following a brief consolidation, the pair came under some aggressive selling pressure during the mid-European session on Friday and extended the previous session's intraday pullback from the vicinity of the very important 200-day SMA. The latest leg of a sudden fall over the past couple of hours lacked any obvious fundamental catalyst and could be solely attributed to some renewed US dollar buying interest.

Weighed down by resurgent USD demand

Despite the US President Donald Trump’s impeachment by the House of Representatives, the greenback managed to regain some positive traction on the last day of the trading week. A strong intraday upsurge in the US Treasury bond yields turned out to be one of the key factors underpinning the buck, which eventually exerted some heavy downward pressure on the major.

This coupled with possibilities of some intraday trading stops being triggered below the Asian session swing lows, around the 1.1115 region, further collaborated towards aggravating the bearish pressure. Meanwhile, the downside is likely to remain limited, at least for the time being, as investors now look forward to a slew of important US macro data for some meaningful impetus.

Friday’s US economic docket highlights the release of the final Q3 GDP growth figures. This will be followed by the release of personal income/spending data and the Core PCE price index, which might influence the USD price dynamics and assist traders to grab some short-term opportunities.

Technical levels to watch