At the same time the recent improvement in housing data has given the greenback a bit of a tailwind and has seen it outperform against the majors again. Perhaps the most significant move was against the euro as the single currency finally lost its grip. In a nutshell, the euro is the funding currency of choice and, when we are risk-on, the euro gets sold off.
EUR/USD dropped to $1.1150, which was its lowest level since 8 June. This move also saw the pair close below the 50-day moving average and this could see traders have more conviction on the short side.
The downtrend that has been in place since December 2014 is still in play and is likely to continue capping prices in the short term. Near-term targets are likely to be in the $1.1000 region where an uptrend support line kicks in.