EUR/USD Price Analysis: A breakdown of 1.1740 opens the door to extra losses

• EUR/USD reverses the initial optimism and drops sharply below 1.18.
• Initial contention now emerges around monthly lows in the 1.1740/35 band.

EUR/USD drops to fresh 2-day lows in the sub-1.1800 area at the beginning of the week quickly eroding the optimism seen during the Asian trading hours.

A deeper pullback is not ruled out just yet and could initially target the monthly lows in the 1.1740 region ahead of the more relevant contention zone near 1.17, where converge late August lows and a Fibo level (of the 2017-2018 rally). The 55-day SMA, today at 1.1722, also reinforces this critical juncture.

Looking at the broader scenario, the bullish view on EUR/USD is expected to remain unchanged as long as the pair trades above the critical 200-day SMA, today at 1.1223.

EUR/USD daily chart