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EUR/USD drops to fresh lows near 1.1260 on German data

FXStreet (Mumbai) - The EUR/USD pair remains confined within familiar ranges, although dipped to fresh session lows after the German industrial output fell sharply in August, far below expectations.

EUR/USD testing hourly 20-SMA

The EUR/USD pair trades -0.11% lower at 1.1262, hovering close to fresh session lows of 1.1257 struck in last minutes. The shared currency ran through fresh offers versus the US dollar after the German industrial production significantly weakened in August, opposed to the expectations of a slower pace of growth.

Industrial production in Germany fell 1.2% m/m in August, after a 1.2% growth seen in the July according to Destatis. Markets had expected a 0.2% gain. On annual basis, production added 2.3% in Aug, versus a 0.8% gain in July and standing below the projected 3.3% growth.

Moreover, a broadly supported US dollar on the back of higher treasury yields, also adds to the bearish pressure on the major. The benchmark 10-year treasury yields rally 1.47% to 2.065%. While the 2-year yields on the US notes rocket nearly 3%% to 0.621%.

Meanwhile, the main currency pair is expected to track the sentiment on the European markets amid a data-deficient EUR calendar ahead.

EUR/USD Technical Levels

On the upside, the major faces immediate resistance near 1.1285-1.1290 region (Sept 29, Oct 5 and Today’s High) beyond which post NFP highs at 1.1319, could act as a strong hurdle. A breach of the last could open doors for a test of 1.1400 (round number). While the immediate support is located at 1.1230 region, which is the confluence zone of the 5, 20 & 50-DMA, below which 1.1209-1.1211 levels (hourly 100 & 200-SMA) could come into the picture. A failure to resist the last, the prices could drown to 1.1147 (100-DMA).

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