EUR/USD retreats further, drops to fresh one-week lows near 1.1320

• US dollar prints fresh highs versus main European currencies.
• EUR/USD having worst day in months, drops below the 20-day SMA.

The EUR/USD has been falling constantly since the European session, and on American hours reached a fresh weekly low at 1.1325. It is hovering near 1.1330/35, with the negative tone intact.

The euro is falling more than seventy pips versus the US dollar, having the worst day in months as US yields keep rising and amid a big drop in equity prices. Weaker-than-expected economic data from the US did not stop the greenback. The Empire manufacturing index dropped unexpectedly to contraction territory in January.  

In Wall Street, the Dow Jones is falling by 1.39% and the Nasdaq drops 1.97%. The US 10-year yield stands at 1.84%, and the 30-year at 2.17%. The combination of higher yields and risk aversion is boosting the greenback on Tuesday, particularly against main European currencies.

From a technical perspective, if the EUR/USD fails to recover 1.1370 it could remain under pressure, looking at the 1.1300 zone and then the 1.1260 support area. The slide pushed the pair back below the 20-day simple moving average and into the previous trading range that prevails all December.

Technical levels