EURUSD testing below 1.0570 as US Dollar bumps higher

• The EUR/USD is drooping into new six-month lows for Tuesday.
• The Euro initially rallied to a session high of 1.0610 before running out of steam, heading back into the day's lows.
• Markets will be looking ahead to US GDP figures on Thursday.

The Euro (EUR) caught a small lift against the Greenback (USD) in early Tuesday trading before reversing direction and heading back into bearish territory and is now probing into the EUR/USD pair's lowest prices in half a year.

The broad US Dollar Index (DXY) is seeing a healthy bid across the markets, bolstered by a jump in US Treasury yields. 

German 10-year Bund yields are also receding from 12-year highs above 2.80%, exacerbating the Euro's backslide.

Adding to the EUR's woes is a rate cycle logjam within the European Central Bank (ECB). Voting members of the ECB have reached a consensus that it's best to avoid any further rate hikes as the central bank waits for evidence that current rates are having the desired effect.

Inflation still remains above target for the European Union's domestic economy, but policymakers fear leaning on rates too fast and choking out what little economic growth currently exists. Markets are broadly anticipating a continued slowdown in the EU's economy, with jobs growth evaporating and economic activity remaining sluggish. 

US data in the pipe, Friday to see EU CPI & US PCE

The US Housing Price Index for July came in above expectations, printing 0.8% to vault over the forecast 0.5% and doubling the previous reading of 0.4%.

Wednesday will see US Durable Goods Orders for August, which is forecast to print at -0.5%, a rebound from the previous reading of -5.2%.

Thursday will bring the ECB's latest Economic Bulletin, while the Federal Reserve's (Fed) Chair Jerome Powell will be making a public statement at 20:00 GMT.

Before Powel though, US Gross Domestic Product (GDP) for the second quarter will be dropping, and the headline annualized reading is forecast to hold steady at 2.1%.

Investors will be watching closely for Friday's double feature, where the EU's Consumer Price Index (CPI) and the US' Personal Consumption Expenditure (PCE) Price Index data publishes.

EU CPI is expected to decline to 4.8% from 5.3% for the annualized period into September.

US PCE inflation for the month of August is forecast to hold steady at the previous figure of 0.2%.

EUR/USD technical outlook

The EUR/USD saw a clean rejection of the 34-hour Exponential Moving Average (EMA) early Tuesday near 1.0605, and the pair is now testing into new six-month lows on the south side of 1.0570.

On the daily candlesticks, the EUR/USD is notably bearish, continuing to fall from the 200-day Simple Moving Average (SMA) currently turning bearish just below 1.0850, with dynamic resistance from a descending trendline from July's swing high above 1.1250.

Technical indicators are fully pinned into oversold territory, but bidders will want to wait for a confirmed recovery pattern before attempting to catch this particular falling knife.

EUR/USD daily chart

EUR/USD technical levels