EUR/USD plunges to 3-week low, 1.0600 mark a whisker away

The EUR/USD pair maintained its offered tone for the fourth session in the previous five and dropped to three-week lows during early NA session.

Currently trading around 1.0610 region, the pair remained under selling pressure on Friday in wake of a follow through greenback buying interest against the backdrop of Trump's pro-growth policies. Trump on Thursday promised to unveil a “phenomenal” tax plan in coming weeks, which seems to have revived hopes of faster US economic growth and continues to underpin the greenback.

On economic data front, the import price data from the US did little to dent bullish sentiment surrounding the greenback, with the key US Dollar Index now eyeing to reclaim 101.00 round figure mark. 

Meanwhile, investors refrained from buying the shared currency amid growing political uncertainty ahead of the French Presidential election and could be another factor collaborating to the pair's downslide on Friday. 

From technical perspective, the pair has now moved on the brink of breaking below 50-day SMA support and a convincing break below this immediate support would open room for continuation of the pair's near-term downward trajectory.

Traders would now look forward to the release of Prelim UoM Consumer Sentiment for February, which might assist the greenback to gain additional traction during NY trading session. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "technically and in the short term, the pair is poised to extend its decline, as in the 1 hour chart, the price is continuously retreating on attempts to advance beyond a bearish 20 SMA, currently at 1.0650, offering an immediate dynamic resistance, whilst technical indicators hold within bearish territory, with limited bearish strength. In the 4 hours chart, the RSI indicator heads south around 33, the Momentum indicator holds below its 100 level with no clear directional strength, but the price is also below a sharply  bearish 20 SMA and extending below the 200 SMA for the first time in nearly a month, supporting some further declines ahead towards the key Fibonacci support at 1.0565."