EUR/USD erases gains, drops toward 1.0400 on a quiet day

US markets are closed, price action limited.
US dollar recovers and turns positive.
EUR/USD unable to hold to gains, still vulnerable.

Matías Salord FXStreet

The EUR/USD dropped from 1.0461 to 1.0416, approaching the Asian session low as the US dollar recovered strength. Volatility remains limited amid low volume. US markets are closed on Monday.

Low volume on US Independence Day

The EUR/SUD shows no surprises on a quiet session across financial market amid a holiday in the US. The pair approached 1.0470 earlier on Monday but it lost momentum and pullback to the levels it closed on Friday.

The key driver has been the US dollar. After spending the day in negative territory, the DXY turned positive, rising back above 105.00. Wall Street futures are modestly lower, while European markets finished mixed.

Economic data from the Eurozone showed the Producer Price Index rose 0.6% in May, below the 1% of market consensus. The annual rate dropped from 37.2% to 36.3%, a level that continues to warrant rate hikes from the European Central Bank. The Sentix Investor Confidence tumbled from -15.8 to -26.4 in July.

Activity will return to normal on Tuesday. The next key event in the US will be on Wednesday with the FOMC minutes of its latest meeting. On Friday, the official employment report is due.

Looking vulnerable

The EUR/USD was unable to recover 1.0470, and it remains vulnerable. The lack of strength in the recovery keeps the door open to a decline to 1.0400. Below the next support is 1.0380, the last defence to the year-to-date low of 1.0350.

If the euro rises above 1.0470, it could gain momentum, and extend the move higher to 1.0490, alleviating the bearish pressure. At 1.0520, awaits the 20-day Simple Moving Average.

Technical levels

USD/MXN

Overview
Today last price	20.2926
Today Daily Change	0.0322
Today Daily Change %	0.16
Today daily open	20.2604

Trends
Daily SMA20	20.0676
Daily SMA50	20.0519
Daily SMA100	20.1873
Daily SMA200	20.4274

Levels
Previous Daily High	20.4665
Previous Daily Low	20.0921
Previous Weekly High	20.4665
Previous Weekly Low	19.8201
Previous Monthly High	20.7028
Previous Monthly Low	19.4709
Daily Fibonacci 38.2%	20.3235
Daily Fibonacci 61.8%	20.2351
Daily Pivot Point S1	20.0795
Daily Pivot Point S2	19.8986
Daily Pivot Point S3	19.7051
Daily Pivot Point R1	20.4539
Daily Pivot Point R2	20.6474
Daily Pivot Point R3	20.8283

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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