A fresh wave of greenback selling pressure emerged during early NA session, helping the EUR/USD pair to recover early losses and refresh session tops beyond the 112.00 handle.
The pair caught some strong bids after an unexpected contraction in the US durable goods orders data for the second consecutive month, coming-in at -1.1% for May as against drop of 0.8% recorded in the previous month. Meanwhile, core durable goods orders (excluding transportation item) registered a tepid growth of 0.1%, clearly reflecting subdued business environment.
Adding to the disappointment, the Chicago Fed National Activity Index moved down to -0.26 in May, down from +0.57 in April and raised skepticism over prospects of additional Fed rate-hike acting in 2017. The same is evident from tumbling US Treasury bond yields, which is eventually weighing heavily on the US Dollar and helping the major to build on Friday's strong gains led by cautious comments by couple of FOMC members.
Traders now look forward to the ECB President Mario Draghis speech at the European Central Bank Forum on Central Banking for some clues over the central bank's monetary policy outlook, which could provide some fresh impetus later during the NY trading session.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet writes: "The pair now trades at 1.1209, fresh daily highs, and struggling once again with its 100 SMA in the 4 hours chart, with the price having bounced from the 1.1170 region, where the 20 and 200 SMAs converge with bullish slopes. In the same chart, technical indicators have bounced from their mid-lines, but are still below previous daily highs. Should the advance extend beyond 1.1220, stops will likely be triggered, leading to a continued advance for the rest of the US session."
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