EUR/USD eases to fresh daily lows below 1.19

• EUR/USD loses more than 60 pips from daily highs.
• Fed's Kaplan sees a rate hike in near future appropriate.
• DXY sticks to modest daily gains, stays below 93.

After closing the previous week nearly 200 pips higher, the EUR/USD pair stretched its upside to a fresh two-month high at 1.1960 in the European trading hours before turning negative on the day in the US afternoon. The pair, which recently renewed its daily low at 1.1895, is now trading at 1.1899, losing 0.28% on the day.

Solid data and hawkish remarks from Fed's Kaplan lift the DXY

The greenback found some much-needed demand in the early NA session after the data released by the U.S. Census Bureau and the Department of Housing and Urban Development revealed that the sales of new single-family houses in October reached its highest level in a decade at 685,000. On the back of the data, the DXY turned north and pulled away from the fresh two-month low that it touched at 92.43. In the last hours of the day, the index went into a consolidation and was last seen at 92.85, up 0.15% on the day.

In the meantime, some relatively hawkish comments from Fed's Kaplan provided an additional boost to the index. In an essay published on the bank's website, Dallas Federal Reserve's President Robert Kaplan argued that it would be appropriate, in the near future, to take the next step in the process of removing monetary accommodation. "If we wait too long to see actual evidence of inflation, we may get behind the curve and have to subsequently raise rates more rapidly,” Kaplan further added.

The only data scheduled to be released from the euro area will be the private loans and M3 money supply, which are unlikely to have a significant impact on the price action. Later in the day, wholesale inventories and goods trade balance from the U.S. will be followed by the participants ahead of speeches from FOMC members Powell, Dudley, and Harker. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, writes, "technically and for the upcoming sessions, the pair retains the bullish stance despite the modest daily pullback, as in the 4 hours chart, technical indicators have managed to correct extreme overbought conditions, but remain well into positive territory, with the RSI around 62 indicating a limited downward strength. In the same chart, the 20 SMA maintains its bullish slope around 1.1870, reinforcing the view. The 1.1890 region is the immediate support, en route to 1.1860, while only below 1.1820 bulls will lose hope, handing the grip to bears."

According to the analyst, resistances could be seen at 1.1960, 1.2000, and 1.2045.