EUR/USD finds support at 1.1800 after rejection at 1.1905

The euro has been unable to hold above 1.1900 once again on Monday and dropped sharply from two-week highs at 1.1905. The strong recovery of the US dollar on the North American trading session has sent the pair nearly 100 pips lower, to hit support at 1.1800 area before bouncing up to 1.1830 at the time of writing.

Euro dives with the USD on recovery

The EUR/USD opened the week on a strong note, buoyed by the positive market sentiment after the pharmaceutical giant, AstraZeneca reported that its COVID-19 vaccine is 90% effective. Beyond that, the better than expected Eurozone flash PMIs contributed to increasing demand for the euro during the European trading session.

The positive euro trend, however, was capped on the early US session as the US dollar bounced up strongly following upbeat US PMI figures. The hitherto weak USD appreciated against its main rivals after the preliminary Markit Purchasing Managers Index reported better than expected activity data in both, the services and manufacturing sectors, boosting confidence in the resilience of US economy.

EUR/USD faces strong resistance at 1.1920

FXStreet’s Chief Analyst Valeria Bednarik points out to 1.1920 as a key level to determine the near-trend direction of the euro: “The EUR/USD pair faces strong resistance in the 1.1910/20 price zone, where it established intraday highs between October and November. Further gains beyond the mentioned resistance area expose the yearly high at 1.2011.”

Technical levels to watch