EUR/USD rebounds and rises above 1.1380 as USD weakens
- Euro hits fresh daily highs versus US Dollar, remains within yesterday’s price range.
- US dollar losses momentum and drops, particularly against commodity and emerging market currencies.
After holding around 1.1355/65 for hours the EUR/USD pair hit a daily low at 1.1345 and bounced to the upside, rising back above 1.1380. As of writing trades at the 1.1387, the highest level of the day, up 22 pips.
The move higher took place amid a decline of the US Dollar across the board. The DXY, after spending most of the time in positive territory, is now down 0.02% at 96.14, trimming yesterday’s gains.
Data and Trump as usual
In the US, the Durable Goods Orders report showed a decline in May of 1.3% in the headline and a negative revisions to previous data. Some details were positive. “The drop in durable goods orders is mostly aircraft weakness amid Boeing’s struggles and explained the details were better with upticks in core capital goods orders and shipments, but the factory sector remains under pressure”, mentioned Wells Fargo analysts. Another report showed that goods trade balance widened in May to $74.55B. Earlier, the German Consumer Confidence tracked by GfK showed a decline to 9.8, confirming the downbeat momentum.
Economic reports were in line with current expectation about the economic momentum and market participants ignored the data. Despite the numbers, equity prices in Wall Street are higher (off highs) supported by comments from Treasury Secretary Mnuchin that fueled optimism about a trade deal between the US and China. In an interview, President Trump criticized again the policy of the Federal Reserve and regarding China considered that a deal is posibble and if no agreement is reach will impose new tariffs of around 10%, not 25%.
EUR/USD Levels to watch
The pair is testing the 1.1380 area if ti rises on top, the next short-term target might be seen at 1.1395 and if it continues, at 1.1410 (June 25 high) is the next resistance level to break. On the flip side, the immediate support is the 20-hour moving average at 1.1360, followed by 1.1340/45 (June 25 & 26 low) and 1.1315 (June 20 high).
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.
