EUR/USD hovering around 1.2250, consolidates gains
|- EUR/USD rises a hundred pips from lows.
- USD remains under pressure, unable to move away from lows.
The EUR/USD pair printed a fresh daily high after the beginning of the US session at 1.2265 and then pulled back modestly. It is hovering around 1.2250, consolidating a daily gain of near 70 pips.
The tone remains positive for the euro but the upside seems limited by 1.2260. Earlier today it dropped to 1.2163, hitting the lowest in three days. From the lows it reversed, rising a hundred pips amid a decline of the greenback.
The US Dollar remains under pressure, unable to recover ground significantly. It topped during the Asian session and failed to hold to gains. Economic data from the US did not offer a boost. Initial jobless claims dropped more-than-expected to 220K, the lowest since 1973 and building permits also bettered expectations by rising to an annual rate of 1.302 million. Those reports were offset by a larger-than-expected decline in the Philly Fed Manufacturing Index (22.2 vs 25.0) and by a sharp slide in housing starts. According to some analysts, concerns over a potential US government shutdowns weighed on the dollar today.
Technical outlook
The undertone points to the upside, but the euro has been unable to break and hold on top of 1.2275. If it manages to do so, a test of 1.2300 seems likely. On the flip side, momentum would favor the downside (intraday) if EUR/USD drops below 1.2215 (20-hour moving average). Below, support levels might lie at 1.2195, 1.2165 (daily low) and 1.2090.
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