EUR/USD attacks 1.1300 amid negative equities

A tepid-bounce attempted by the EUR/USD pair in early trades faded at the mid-point of 1.13 handle, sending the rate sharply lower towards daily S1 located at 1.1301.

EUR/USD drops despite risk-off

Currently, EUR/USD drops -0.40% to fresh session lows of 1.1305, look to breach 1.1300 levels at 1.1335. The main currency pair extended its retreat from two-month tops and now faces strong offers as the broad USD recovery regains momentum. The USD index advances further to test 94.50, up +0.41% on the day.

Moreover, the funding currency euro fails to benefit from persisting risk-off trades, with both the European stocks and oil prices trading in the red. The German DAX drops -0.80%, the UK’s FTSE falls -0.13%, while the pan-European benchmark, the Euro Stoxx 50 slumps -1% so far this session.

Calendar-wise, we had a poor German PPI print, which showed that the country’s factory gate prices dropped 2% y/y in July, compared to the 2.2% decline booked in June. Markets had expected a dip to 2.1% in July.

EUR/USD Technical Levels               

In terms of technicals, the pair finds the immediate resistance 1.1367 (post-Brexit high). A break beyond the last, doors will open for a test of 1.1400 (psychological levels). On the flip side, the immediate support is placed at 1.1288 (5-DMA) below which 1.1220 (10-DMA) could be tested.