Persistent USD demand continues exerting downward pressure. Technical selling further contributes to the ongoing downfall.
The EUR/USD pair quickly retreated around 60-65 pips from session tops and refreshed over 2-week lows in the last minute. The pair faded an early European session spike to the 1.2300 neighborhood and resumed with its recent corrective slide that began last Friday following the release of upbeat US monthly jobs report.
In absence of any fresh development, the latest leg of sharp fall could be solely attributed to persistent buying interest surrounding the US Dollar, which has been gaining traction on firming expectations about additional Fed rate hike moves through 2018.
Meanwhile, today's downslide could also be attributed to some follow-through technical selling, especially after yesterday's decisive break down below a two-week old trading range.
In absence of any major market moving economic releases from the US, the prevailing USD strength now seems to have opened room for an extension of the pair's near-term bearish trajectory.
Technical levels to watch
A follow-through selling pressure has the potential to continue dragging the pair further towards the 1.2210-1.2200 support, below which the pair could further get extended towards 1.2160 support.
On the flip side, the 1.2300 handle now seems to have emerged as an immediate resistance, which if cleared might trigger a short-covering bounce towards 1.2335-40 support-turned-resistance zone.