EUR/USD drops further, testing 1.1170 ahead of US data

The selling pressure is now picking up pace around the common currency, dragging EUR/USD to test fresh daily lows in the 1.1170 region.

EUR/USD attention to US calendar

Spot remains under pressure on Monday, extending its bearish leg to the current 2-week lows in the 1.1170 area in response to a persistent buying interest in the buck.

Friday’s speech by Chair J.Yellen at Jackson Hole plus previous comments by FOMC’s officials has given fresh hopes to USD-bulls of a potential rate hike by the Fed at the September meeting.

In fact, an according to CME Group’s FedWatch tool, the probability of higher rates in September has climbed to 33% (from marginal levels just a week ago) and 44% for the month of December.

Ahead in the NA session, US PCE, Personal Income/Spending and the Dallas Fed Manufacturing index are all due and expected to keep the dollar in centre stage.

EUR/USD levels to watch

The pair is now losing 0.21% at 1.1172 and a breakdown of 1.1153 (55-day sma) would open the door to 1.1119 (200-day sma) and finally 1.1043 (low Aug.5). On the other hand, the next hurdle lines up at 1.1357 (high Aug.23) followed by 1.1367 (high Aug.18) and then 1.1434 (high Jun.24).