EUR/USD clocked 11-week low of 1.0964 in Asia and was last seen trading around 1.0980 levels. The currency pair closed below 1.10 handle on Friday for the first time since July 27.
Rate differential at play
The breakdown in EUR/USD last week represents rise in Fed rate hike bets and expectations that ECB could extend its QE program further. As per CME fed funds futures, the probability of a rate hike in December is 70%.
Meanwhile, ECB is widely expected to extend its QE program before beginning the QE Taper. The focus today remains on the US-German bond yield spread and US industrial production figures. A possible correction in EUR/GBP cross could also have an impact on the EUR/USD pair.
EUR/USD Technical Levels
A break above 1.10 (zero figure) would open up upside towards 1.1046 (Aug 5 low), beyond which a major hurlde is seen at 1.1095 (10-DMA). On the lower side, breach of 1.0964 (daily low) could yield a test of 1.0911 (Brexit day low) and 1.09 (zero figure).