EUR/USD reverses from 1.0600 and drops to multi-day lows near 1.0500
|- US dollar gains momentum during American session.
- Euro prints fresh lows versus USD, CHF and GBP.
- Stocks erase gains in Wall Street, US yields move off highs.
The EUR/USD dropped further and bottomed at 1.0501, the lowest level since Thursday. It then trimmed losses, rising to 1.0530. The move lower took place amid a stronger US dollar across the board.
The greenback gained ground as Wall Street indexes turned negative. The Dow Jones is falling by 0.51% and the Nasdaq by 1.74%. US yields pulled with the US 10-year at 3.20% and the 30-year at 3.31%.
US economic data came in below expectations. The Conference Board’s Consumer Confidence Index dropped to 98.7 in June, the lowest level in 16 months. The Richmond Fed Manufacturing Index tumbled to -19 in June from -9, against market consensus of -11. The S&P/Case Shiller Price Index rose 1.6% in April. The numbers did not affect the dollar.
The euro is among the worst performers of the American session. EUR/CHF dropped to test last week's lows near 1.0050 and EUR/GBP pulled back to 0.8620. The common currency did not benefit from hawkish comments by European Central Bank officials.
The annual ECB forum in Portugal will have its last day on Wednesday. A discussion panel will include Lagarde (ECB), Powell (Fed) and Baily (BoE).
Short-term outlook
The EUR/USD moved off lows and is back above 1.0530. The pair will likely continue to move sideways between 1.0500 and 1.0600. Earlier on Tuesday the euro traded above 1.0600 but again it was rejected from those levels; it needs to consolidate above those levels to open the doors to more gains.
The immediate resistance is seen at 1.0550 (20-SMA in four hour chart); while below EUR/USD could test 1.0500 again. The next level to watch is last week’s low at 1.0467.
Technical levels
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