EUR/USD refreshes monthly lows below 1.18 ahead of Yellen

The unabated demand for the greenback continues to drive the price action on Tuesday, pushing the EUR/USD pair to its lowest level since August 23 at 1.1770 and bringing the total loss since the start of the week up to 160 pips. As of writing, the pair was trading a couple of pips above that level, down 0.6% on the day. 

The US Dollar Index, which started the week on a positive note extending its Fed-inspired gains, recently touched the 93 handle for the first time in September. Today's data from the U.S. seems to have provided an additional boost to the greenback in the first half of the NA session. According to the data released by S&P Dow Jones Indices, national house prices rose 5.8% on a yearly basis in July while the Richmond Fed Manufacturing Index advanced to 19 in September from 14 in August and surpassed the market expectation of 13.

• US: National home price index continues to rise - S&P/Case-Shiller
• Richmond Fed: Composite manufacturing index rose from 14 to 19

Although the greenback's upsurge took a break ahead of the Fed Governor Lael Brainard's, a known dove, speech in the session, the fact that she didn't comment on the policy outlook allowed the DXY to extend its upside. Moreover, easing geopolitical tensions between North Korea and the United States are boosting the Treasury-bond yields, supporting the index's rise. At the moment, the 10-year T-bond yield is up 1% on the day.

Later in the session, participants will be closely following the keynote speech by the Federal Reserve Chair Janet Yellen at the annual meeting of the National Association for Business Economics in Cleveland at 16:45 GMT. 

Technical outlook

Despite the sharp drop witnessed in the last two days, the RSI indicator on the daily graph hasn't reached the 30 mark yet, suggesting that the fall is likely to extend further before the pair becomes technically oversold. 1.1730 (Aug. 21 low) could be seen as the first technical support for the pair ahead of 1.1620 (100-DMA) and 1.1500 (psychological level). On the upside, resistances align at 1.1860 (daily high), 1.1935 (20-DMA) and 1.2000 (psychological level). 

• EUR futures: bearish sentiment picks up pace