EUR/USD off lows, still weaker below 1.0400 handle

The EUR/USD pair came under renewed selling pressure and dropped closer to last week's multi-year lows. The pair, however, bounced off session lows but remained below 1.0400 handle, with mild losses.

Currently trading around 1.0385-90 region, resurgent greenback buying interest has been the key factor attracting fresh selling pressure around the major. Also on Monday, the pair failed to benefit from the release of upbeat German IFO survey and reversed Friday's tepid recovery gains as hawkish Fed outlook for 2017 continued supporting the prevalent strong bullish sentiment surrounding the greenback.

There are no important market moving releases due on Tuesday and hence, the pair remains at the mercy of broader US Dollar price-dynamics. However, the incoming data would remain key driver for Fed rate-hike expectations and hence, investors will remain focus on some important US macro releases lined-up later during the week, including the final revision of US GDP growth numbers for Q3 2016.

Technical levels to watch

A fresh bout of selling pressure below session low support near 1.0375 now seems to accelerate the slide, even below 1.0366 (multi-year lows), towards 1.0350 support area en-route 2003 yearly lows support near 1.0335 region. On the upside, recovery above session peak resistance near 1.0415-20 region is likely to lift the pair towards 1.0465 horizontal resistance, which if cleared would trigger a short-covering rally and lift the pair beyond 1.0500 psychological mark, towards testing its next resistance near 1.0535-40 area.