EUR/USD drops further to test 1.2000 ahead of EZ Sentix

• DXY extends post-NFP rebound.
• Nears 10-DMA support of 1.2006.

• Eurozone Sentix and retail sales eyed.

The recovery in the EUR/USD pair ran into resistance once again near the midpoint of the 1.20 handle, and since then the bears are in control, now pushing the rates towards the 10-DMA support of 1.2006.

The move lower in the spot is mainly driven by a generalized buying seen around the US dollar, which remains the key theme heading into the European open.  The greenback finds support from higher US wage growth numbers, which helps boost the Fed rate hike expectations this year.

Moreover, worse-than-expected German factory orders data for the month of November further exacerbated the pain in the major. The German factory orders came in at -0.4% m/m in Nov versus 0.0% expected and +0.5% previous.

Haresh Menghani, Analyst at FXStreet notes, “With the only scheduled release of EZ Sentix Investor Confidence index, today's economic docket lacks any major market-moving economic releases and hence, the greenback price dynamics would remain a key determinant of the pair's movement on the first trading day of the week.”

EUR/USD Technical Levels

Jim Langlands at FX Charts, writes: “The dailies still look positive though and if we can take out the 8 Sept high of 1.2098 it would then open up the chance of a move towards 1.2160 and in the bigger picture, towards 1.24 (200 MMA). In the meantime, the short-term momentum indicators are mixed and could see a further choppy trade above 1.2000, below which would possibly allow a run to 1.1950/60.”