The EURUSD pair, trading at 1.05042, experienced a significant drop below the 1.0500 level and reached a low point not seen in several months, around the 1.0480s range.

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• EUR/USD plummeted below 1.0500 and reached a multi-month low at around 1.0480s.

The pair currently trades last at 1.05042.

The previous day high was 1.0609 while the previous day low was 1.0562. The daily 38.2% Fib levels comes at 1.058, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0591, expected to provide resistance.

The Euro (EUR) is extending its losses versus the US Dollar (USD) on Wednesday after reaching an eight-month low at around 1.0488, though traders booking profits ahead of the New York close lifted the major back above the 1.0500 handle. At the time of writing, the EUR/USD is trading at 1.0505, near the lows of the month after it hit a daily high of 1.0574.

Fundamentals continue to weigh on the Euro front after the money supply shrank the most on record in August, as banks halted lending and depositors held to their savings. Further data showed that German Consumer Sentiment, as revealed by GfK, deteriorated further, set to fall in October at -26.5, from September -25.6.

Across the pond, the US Department of Commerce showed that Durable Goods Orders for August exceeded estimates and July’s data, suggesting an improvement in consumer spending. However, on the business side, Transportation equipment slid -0.2%, weighed by fewer orders on civilian aircraft, while the strike of United Auto Workers vs. GM, Stellantis, and Ford could weigh on the economic outlook and could weigh on orders and shipments in September.

On the central bank space, European Central Bank (ECB) officials remain hawkish, but inflation aside, data puts into discussion a possible stagflation scenario. Minnesota Fed President Neil Kashkari remained hawkish on the US front, foreseeing one more rate hike and opening the door for more than one if needed.

Technically speaking, the EUR/USD is at new cycle lows, though it appears the pair could consolidate when the Relative Strength Index (RSI) enters oversold territory, following a 400-pip run from 1.0945 toward current spot prices. If the major drops below 1.0500, the next stop would be the January 6 daily low of 1.0481. A decisive break would clear the way to test intermediate support at the November 30 low of 1.0290, followed by the November 21 low at 1.0222. Conversely, the EUR/USD first resistance would be 1.0600.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.0505 at the time of writing. Pair opened at 1.0573 and is trading with a change of -0.64 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.0711, 50 SMA 1.0859, 100 SMA @ 1.0869 and 200 SMA @ 1.083.

The previous day high was 1.0609 while the previous day low was 1.0562. The daily 38.2% Fib levels comes at 1.058, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0591, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.0554, 1.0534, 1.0507
• Pivot resistance is noted at 1.0601, 1.0628, 1.0648

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