EUR/USD drops to session low ahead of US housing data, breaks below 1.1050

The US Dollar maintained its strong bid tone, with the EUR/USD pair now dropping below 1.1050 level to hit a fresh session low.

Earlier during European trading session, the pair's downward momentum gained traction after the release of highly disappointing German ZEW economic sentiment for July. 

Adding to the bearish sentiment surrounding the shared currency, US ratings agency, S&P, noted that Brexit is likely to have a negative impact of around 0.8% on the Euro-zone's GDP growth in 2017-18. 

Moreover, EU Commission also raised concerns over the region’s growth outlook in wake of increasing uncertainty from last month's historic Brexit vote. 

Next in focus would be data from the US housing market, which has the potential to further boost the ongoing bullish sentiment around the greenback. However, this week's ECB meeting on Thursday would remain the key determinant for the pair's near-term direction. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "Technically, the risk remains towards the downside, as in the 4 hours chart, the price keeps developing below its 20 and 100 SMAs, while the technical indicators hold within negative territory, although the lack of momentum persists."

"The price needs to break below 1.1000 to extend its decline down to 1.0960 and 1.0910, while only above 1.1100 the pair has a chance of recovering further, up to the 1.1140/70 region."