EUR/USD has lost its traction at the start of the new year. The pair remains at the merch of the greenback's market valuation and the correction could extend toward 1.1300, FXStreet’s Eren Sengezer reports.

Key technical support in the near-term aligns at 1.1300

“The number of confirmed coronavirus cases continues to rise at a strong pace both in the US and Europe but, as it currently stands, European countries are more likely to tighten restrictions. A slowdown in the eurozone's economic activity due to tighter restrictions will put additional bearish pressure on EUR/USD in the near-term.”

“EUR/USD is testing 1.1340 (former resistance, static level). In case a four-hour candle closes below that level, additional losses toward 1.1300 (psychological level, 200-period SMA) could be witnessed in the near-term.”

“On the upside, 1.1360 (static level, post-ECB high on December 16) aligns as initial resistance before 1.1385 (December 31 high) and 1.3400 (psychological level).”