EUR/USD drops further to test the 1.0900 area on US dollar strength

• Euro hits fresh lows versus US dollar and Swiss franc.
• EUR/USD below the 20-SMA in four hours chart, next support at 1.0880.

The EUR/USD hit a fresh daily low at 1.0899 after breaking the 1.0920 intraday support amid a stronger US dollar. The pair bounced modestly, defending the 1.0900 area. As of writing, it trades at 1.0915, down 50 pips for the day.

The US Dollar Index (DXY) gains 0.40% on Monday. It recently hit at 99.59, the highest level since Thursday. Equity prices in the US opened lower amid US-China tensions but over the last hours trimmed losses with the Nasdaq in positive territory at the moment.

Economic data from the US came in worse than expected having no impact on the market. Factory Orders dropped a record 10.3% during March, against expectations of a 9.7% slide. The ISM-NY Business conditions Index fell from 12.9 to 4.3 in April. The key report of the week will be NFP on Friday.

Regarding the euro, it also printed a new low during the American session versus the Swiss franc. EUR/CHF trades at the lowest in a week at 1.0525.

 Technical outlook

The EUR/USD pair continues to retreat from the one-month high it reached on Friday at 1.1018. The euro was rejected from above 1.1000 and lost more than a hundred pips from the recent top.

Price is back below the 20-SMA in the four hours chart suggesting more weakness ahead, that could spark more losses if it breaks clearly under 1.0900. A recovery above 1.0930/40 would remove the bearish intraday pressure. The next critical support is seen at 1.0880.