/EUR/USD extends losses below 1.20 as DXY holds above 92 | by Eren Sengezer | FXStreet

EUR/USD extends losses below 1.20 as DXY holds above 92 | by Eren Sengezer | FXStreet

Euro Index down 0.5% on the day. DXY recovers above 92 on Monday. EUR/USD loses more than 70 pips. Following its third positive weekly close, the EUR/USD pair started the week under pressure and dropped to its lowest level since December 29 at 1.1955. As of writing, the pair is trading at 1.1965, losing 0.53% on the day. Earlier today, the data from eurozone showed that retail sales increased by 1.5% and 2.8% on a monthly and yearly basis respectively, both readings surpassing the market expectations. Moreover, the European Commission’s Business Climate, Economic Sentiment Indicator, and Industrial Confidence indexes all showed improvements in December. However, the shared currency failed to take advantage of the upbeat data, and the Euro Index recorded its biggest daily drop since mid-December.  On the other hand, the buck started the week on a positive note with the US Dollar Index rising above the 92 mark for the first time in 2018 and kept the selling-pressure alive on the EUR/USD pair. Despite some relatively dovish remarks from Atlanta Fed President Bostic, the index is preserving its daily gains. At the moment, the DXY is up 0.38% at 92.10. Bostic earlier in the session said that the Fed might not need to raise interest rates as many as three times in 2018 given the weak inflation. On Tuesday, the macroeconomic docket in the euro area will feature the unemployment rate, which is expected to ease to 8.7% in November from 8.8% in October.  Technical outlook Valeria Bednarik, American Chief Analyst at FXStreet, writes, “the pair’s decline stalled a couple of pips above a strong support, the 38.2% retracement of the last three-week rally, the immediate support at 1.1955, but according to technical readings in the 4 hours chart,  the decline could continue given that the price is well below a now bearish 20 SMA, whilst technical indicators maintain their strong bearish slopes near oversold territory.” Bednarik further adds, “the slide seems so far corrective, and could continue to be so even if the pair falls down to 1.1920, the 50% retracement of the same decline, although a break below this last will put an interim top in place, and imply a downward continuation toward the 1.1660 price zone.”