EUR/USD drops to 2-week low ahead of Draghi

Having faced rejection near the 1.0900 handle, the EUR/USD pair drifted into negative territory for the third consecutive session and refreshed session low.

Spot has so far maintained bearish bias since the beginning of this week and extended its sharp reversal move from over 6-month highs beyond the 1.1000 handle, touched in reaction to Emmanuel Macron’s victory in the closely watched French Presidential election.

Currently trading around 1.0865-70 region, just a few pips away from 2-week lows of 1.0859 tested just a while ago, the pair's latest leg of sharp slide in the past hour or so could be attributed to a fresh wave of greenback buying interest. 

Growing expectations that the Federal Reserve would eventually move towards raising its benchmark interest rates in June continues to underpin the greenback demand, with the key US Dollar Index reversing all of its early losses and currently placed at session tops near mid-99.00s.

The downslide seems to have stalled, at least for the time being, as investors keenly await ECB President Mario Draghi's speech about the impact of monetary policy. 

Later during the day, the release of export / import price index from the US and Boston Fed President and CEO Eric Rosengren comments should also provide some impetus for short-term traders. 

   •  EUR/USD upside pressure mitigated below 1.0830 – Commerzbank

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The immediate support is 1.0850, followed by 1.0820, this last, the 50% retracement of the post-US election advance and the lowest of the last three weeks. To the upside, 1.0900, the mentioned trend line comes first, followed by the 1.0930/50 region."