EUR/USD looking to recover balance near 1.06 after slipping to 1.0575

• The EUR/USD skidded to a Monday low of 1.0575 as the Euro slips and the Greenback steps higher.
• US Dollar Index is broadly higher across the board to kick off the new trading week.
• ECB’s Lagarde pulls the rug out from under the Euro on “further weakness in economic activity.

The EUR/USD fell off of recent action to settle at a fresh six-month low at the 1.0660 handle. Broadbase US Dollar (USD) support is helping to exacerbate Euro (EUR) declines sparked by dovish central bank comments coming out of Europe on Monday.

The European Central Bank’s (ECB) President Christine Lagarde hit newswires on Monday, noting lagging job growth, broadly weaker economic activity, and an overall decline in momentum.

Despite recent declines in inflation, the ECB’s President Lagarde noted that inflation is expected to remain “too high for too long”, but the ECB is evidently unable to do anything to help assuage those forecasts, with an uneven domestic economy for the pan-European region threatening to tip over into recession if the ECB raises rates too much.

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Economic Calendar looking thin until Friday’s key data drop

The later end of the trading week sees Consumer Price Index (CPI) figures for both the EU and the US slated for Friday, but the midweek is a nominally lighter affair.

The US will see Personal Consumption Expenditure (PCE) figures on Thursday, as well as Gross Domestic Product (GDP) numbers. Annualized GDP for the US’ second quarter is expected to improve from 2.1% to 2.3%.

EUR/USD technical outlook

Intraday action sees the EUR/USD sharply off near-term swing highs near 1.0670, tumbling 0.76% peak-to-trough on Monday.

The Euro slipped to a fresh six-month low  of 1.0575 against the US Dollar, and rebound bids are struggling to regain the 1.06000 handle.

On daily candlesticks, a bearish trend is firmly baked in, with a declining trendline from July’s swing high near 1.1200.

The 200-day Simple Moving Average (SMA) is turning bearish just north of 1.0800, and the 34-day Exponential Moving Average (EMA) is accelerating into a bearish cross, providing technical resistance from 1.0750.

EUR/USD daily chart

EUR/USD technical levels