EUR/USD comes under pressure and drops to 1.1080

• EUR/USD surrenders recent gains and drops to 1.1080/75.
• DXY picks up pace and moves to daily highs.
• US data, Brexit in the limelight so far.

The shared currency is losing part of its shine and is pushing EUR/USD back to the 1.1080 area, or daily/weekly lows.

EUR/USD lower on USD-buying

The pair eroded yesterday’s gains and it seems to have re-shifted the focus to the downside, where the immediate target emerges at the 55-day SMA, today at 1.1040.

The pick up in the demand for the Greenback has prompted spot to fade the recent bullish attempt to levels beyond 1.1100 the figure, all amidst the re-emergence of some Brexit concerns and against the backdrop of rising cautiousness ahead of the FOMC event tomorrow.

In the docket, the most relevant event will be the publication of the key US Consumer Confidence gauged by the Conference Board along some results from the housing sector.

What to look for around EUR

EUR looks unable to return to the area above the 1.1100 mark so far this week, which could spark some near term consolidation ahead of a potential resumption of the downside. Despite the October rally in spot has been exclusively sponsored by weakness in the Dollar, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In addition, the possibility that the German economy could slip into recession in Q3 remains a palpable risk for the outlook and is expected to weigh on EUR in the short/medium term horizon.

EUR/USD levels to watch

At the moment, the pair is losing 0.18% at 1.1079 and a breakdown of 1.1072 (low Oct.25) would target 1.1040 (55-day SMA) en route to 1.0925 (low Sep.3). On the flip side, the immediate hurdle lines up at 1.1126 (100-day SMA) seconded by 1.1171 (monthly high Oct.18) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally).