FXstreet.com (Barcelona) - The Euro has dropped further in early U.S. session breaking support level at 1.2600, and advancing towards next resistance level at 1.2510 area; worse than expected manufacturing data in the U.S. seems to have increased risk aversion and favoured the USD as safe haven.

The EUR/USD looks extremely bearish and it has lost around 200 pips so far on Tuesday. On its way down, next key level would be in the 1.2510 area, while in case of a reverse, the Euro should remain consolidating above 1.2600 before trying to approach the 1.2700 area.

In ten minutes time, Wall Street will open Tuesday's trading session. A negative start for stock markets could increase risk aversion and punish the EUR/USD further.