EUR/USD drops to fresh four-day lows below 1.0900

• EUR/USD continues to erase its weekly gains on Friday.
• US Dollar Index edges higher toward 100 in American session.
• Risk aversion helps USD gather strength against its major rivals.

The EUR/USD pair came under renewed selling pressure during the American session and fell to its lowest level since Monday at 1.0885. As of writing, the pair was trading at 1.0890, losing 0.53% on a daily basis.

Earlier in the day, the European Central Bank's (ECB) Meeting Accounts showed that the Governing Council could adjust the Pandemic Emergency Purchase Programme (PEPP) and other tools at the June meeting.

Commenting on the ECB's statement, “we continue to expect that the PEPP will be expanded and extended. Further modifications to the TLTRO terms could also be in store," said Nordea analysts. "We do not expect the ECB to lower its benchmark rates anymore. It is clearly focusing on other means to ease policy.”

Nevertheless, the EUR/USD pair largely ignored the ECB's remarks and stayed in a consolidation phase near 1.0900.

DXY pushes higher

However, the sour market sentiment amid heightened US-China tensions allowed the USD to continue to gather strength against its rivals and weighed on the pair. The US Dollar Index (DXY), which turned north after testing 99 on Thursday, was last seen gaining 0.4% on the day at 99.83. Reflecting the risk-off atmosphere, Wall Street's three main indexes are down between 0.3% and 0.6%. 

There won't be any macroeconomic data releases in the remainder of the day. On Monday, first-quarter GDP data from Germany will be looked upon for fresh catalysts.

Technical levels to watch for