EUR/USD drops back to 1.1850, EZ Sentix weighs

• DXY still pushing higher on firmer T-yields
• 1.1875/80 – a tough nut to crack
• The EU/UK Brexit deal, US factory orders in focus.

The EUR/USD pair fell sharply to test 1.1840 levels in early Europe, before finding fresh bids in another effort to crack the key the confluence of 5 and 10-DMA near 1.1880 levels. However, the sellers continued to lurk near the last, sending the rates back to the mid-point of 1.18 handle.

EUR/USD: Bears in command ahead of the US data

The spot remains heavily offered amid notable US dollar buying, as markets prefer to hold the US currency amid a major progress on the US tax overhaul plans, which boosted Treasury yields higher across the curve. The USD index rallies +0.45% to 93.22, having posted two-day highs at 93.32 levels last hours.

The latest leg down in the major can be mainly attributed to fresh EUR selling across the board, after the Eurozone Sentix investors’ confidence deteriorated sharply in the reported month, coming in at 31.1 versus 34.0 previous and 33.6 expected.

Moreover, mixed Eurozone PPI data also dulled the demand for the Euro against its American counterpart. Markets now look forward to fresh development around the Brexit deal ahead of the US factory order data due on the cards later in the NA session.

EUR/USD Technical Levels

Karen Jones, Analyst at Commerzbank, notes: “EUR/USD last week rallied to and stalled just ahead of the 78.6% retracement at 1.1976 and is consolidating. A close below 1.1773 55 day ma and preferably below 1.1712 the recent low is needed to alleviate immediate upside pressure. The intraday Elliott wave counts have again neutralized. The Fibonacci retracement at 1.1976 is regarded as the last defense for the 1.2092 September high. Below the 55 day ma alleviates upside pressure – below 1.1712 the 21st November low should negate upside pressure.”