EUR/USD flirting with lows, around 1.1980 level

The EUR/USD pair maintained its offered tone through early NA session and refreshed session low in the past hour, albeit recovered few pips thereafter. 

The pair extended its post-ECB retracement from fresh yearly tops and dropped back below the key 1.20 psychological mark amid broad based USD recovery. 

Easing tensions over N. Korean episode prompted unwinding of safe-haven bets, further reinforced by a strong recovery in the US Treasury bond yields, and helped the key US Dollar Index to stage a solid recovery from over 2-1/2 year lows touched on Friday. 

Meanwhile, the shared currency was also being weighed down by ECB board member Benoît Coeuré's comments that a nagging exchange-rate shock could hold back inflation, though improved growth could offset some of the negative effects of the euro’s strength.  

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Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "Further slides, below the 1.1980 mark may favor a deeper correction, with the next intraday supports at 1.1950 and 1.1910, although the longer term, dominant bullish trend remains firm  in place, and speculative interest will likely take the retracement as a new opportunity to add to longs."