EUR/USD slides further below 1.0700 handle despite of downbeat US data

The EUR/USD pair remained well-offered and extended its slide further below 1.0700 handle to touched a fresh 4-day low. 

Currently trading around 1.0685 region, spot accelerated the downslide after the flash Markit US services PMI showed expansion at the fastest pace since November 2015. However, the US showed new home sales fell short of expectations and witnessed a sharp monthly drop of 10.4% in December, coming-in at 536K annualized pace as against 588K expected and previous month's 598K.

Downbeat housing data, coupled with disappointing jobless claims data, once again failed to assist the greenback to extend its recovery move from 7-week lows, albeit did little to provide any immediate respite for the shared currency. The key US Dollar Index held near session peak around mid-100.00s region. 

Meanwhile, possibilities of some stops getting trigger on a decisive break below 1.0700 handle could have collaborated to the pair's slide since early NA session. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, “The pair has turned bearish in the short term, as in the 1 hour chart, the price is standing well below its 20 and 100 SMAs, with the shortest turning south, whilst technical indicators present strong bearish slopes near oversold readings. In the same chart, the price recovered from its 200 SMA, around 1.0690, with a break below the level favoring additional declines towards 1.0650/60, where the pair has a daily ascendant trend line. In the 4 hours chart, technical readings also favor a new leg lower, given that the price has broken below its 20 SMA and technical indicators entered negative territory.”