EUR/USD erases majority of daily gains, trades below 1.2250

EUR/USD turned south after rising to 1.2266 on Tuesday.
US Dollar Index stages a modest recovery during American trading hours.
Fed's Clarida says Fed could discuss scaling purchases in upcoming meetings.

Eren Sengezer FXStreet

The EUR/USD pair climbed to its highest level since early January at 1.2266 on Tuesday but lost its bullish momentum in the second half of the day. As of writing, the pair was still up 0.17% on a daily basis at 1.2235.

USD selloff pauses

Earlier in the day, the broad-based selling pressure surrounding the greenback helped EUR/USD build on Monday's gains. Additionally, the data from Germany revealed that the IFO survey's Current Assessment improved to 95.7 in May from 94.2 in April. This reading came in better than the market expectation of 95.5 and helped the shared currency gather strength against its rivals.

During the American trading hours, the USD started to gather strength as Well Street's main indexes turned flat on the day after opening in the positive territory. Additionally, hawkish Fed commentary allowed the US Dollar Index to edge higher.

Federal Reserve's Vice Chairman Richard Clarida noted on Tuesday that April's Consumer Price Index (CPI), which showed annual inflation rose to 4.2%, was "a very unpleasant surprise."

Clarida further added that the Fed can discuss scaling back purchases in the upcoming meetings; depending on data flow.

Currently, the US Dollar Index is down only 0.05% on a daily basis at 89.79. Meanwhile, the data from the US showed that the Conference Board's Consumer Confidence Index declined modestly to 117.2 in May from 117.5 in April.

Technical levels to watch for

EUR/USD

Overview
Today last price	1.2236
Today Daily Change	0.0021
Today Daily Change %	0.17
Today daily open	1.2215

Trends
Daily SMA20	1.2122
Daily SMA50	1.199
Daily SMA100	1.2042
Daily SMA200	1.1969

Levels
Previous Daily High	1.223
Previous Daily Low	1.2172
Previous Weekly High	1.2245
Previous Weekly Low	1.2126
Previous Monthly High	1.215
Previous Monthly Low	1.1713
Daily Fibonacci 38.2%	1.2208
Daily Fibonacci 61.8%	1.2194
Daily Pivot Point S1	1.2181
Daily Pivot Point S2	1.2148
Daily Pivot Point S3	1.2124
Daily Pivot Point R1	1.2239
Daily Pivot Point R2	1.2263
Daily Pivot Point R3	1.2297

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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