EUR/USD slides farther below 1.0900; more pain ahead?

The greenback continued gaining traction through early NA session, dragging the EUR/USD pair further below the 1.0900 handle.

Spot extended previous session's sharp reversal move and remained heavily offered for the second consecutive session. The pair has now retreated around 140-pips from 6-month highs touched in reaction to Emmanuel Macron’s victory in the closely watched French Presidential election.

With Fed rate-hike expectations regaining the centre stage, a fresh wave of up-move in the US treasury bond yields further collaborated to the greenback strong up-move witnessed so far this week. In fact, the key US Dollar Index has now surged closer to mid-99.00s and is turning out to be an exclusive driver of the pair's downslide to 1.0880-75 horizontal support.

It would now be interesting to see, if the pair is able to stage any recovery or breaks below the said support and aim towards testing the very important 200-day SMA ahead of speeches by couple of FOMC members - Boston Fed President Eric Rosengren and Dallas Fed President Robert Steven Kaplan.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "There's a short term ascendant trend line in the 1.0890 region, and a break below it should lead to a test of 1.0850, a strong static support from these last weeks. Below it 1.0820, the low post-French election is key, as further slides will confirm an interim top and see the pair extending its decline down to 1.0730."

She further adds, "a recovery above 1.0930 will take off some of the downward pressure, yet it will take an extension beyond the mentioned 1.0970 to see the pair recovering its upward strength."