EUR/USD hit a new short-term low and compounding risks could drive the pair lower to test the key 1.1500 level and option barriers residing there.
The dismal German factory orders have helped EUR/USD slide as lower Bund yields increased the dollar's yield advantage over the euro.
Growing concerns over Italy's budget talks have weighed as well.
Italian PM Di Maio said EU fiscal rules aren't a priority in Italy's next budget nR1N1SZ025.
Uncertainty surrounding Italy's spending plans should see reluctance to be long EUR/USD persist.
The BOJ's recent action presents bearish risks for the euro as well.
Higher JGB yields could drive Japanese investors out of euro zone bonds and instead see local investments made which should depress the euro. The combination of all of these factors see EUR/USD option plays suggesting downside risks are increasing nL1N1UX038.
Technicals also bolster the downside risks.
Daily and monthly RSIs are biased down with no divergence and consolidation of long-term losses persists.
A break of 1.1500 likely ends that consolidation phase, which could usher in the next leg of the long-term bear market.
The door to 1.0900/1.1000 support is then open.
chart: Click here