EUR/USD retreats from weekly highs to 1.1060

The EUR/USD retreated over the last hours and moved off weekly highs, below 1.1100. US data and some a less weak US Dollar favored the correction. Recently dropped to 1.1060 and it is trading at 1.1075, still positive for the day, on its way to the highest close since August 28. 

The post-European Central Bank rally of EUR/USD run today into resistance around 1.1100 and pulled back. It is consolidating weekly gains, supported by a stabilization of the Euro and a slide of the US Dollar. 

Data from the US favored the greenback and sent US yields further to the upside. Retail sales in August rose 0.4% above market expectations of a 0.2 increase. Later, the preliminary reading of the University of Michigan's Consumer Confidence Index showed a rebound from 89.8 to 92.0 in September. The 10-year yield rose from below 1.80% to 1.87%, reaching the highest since August 2. 

Technical outlook

For the first time since April, EUR/USD is about to post two consecutive weekly gains. Still the long term chart points to the downside, but over the short-term the US Dollar could have lost momentum particularly after rebounding again from the 1.0925 area.

“The pair has bottomed twice at 1.0926 this September, but a double bottom figure is still unclear”, notes Valeria Bednarik, Chief Analyst at FXStreet. According to  her the spike above the neckline was unsustainable, therefore diminishing the relevance of the figure. “As it happened last week, the 1.1000 level is the immediate support, and below it, the next relevant one is the two-year low at 1.0926, followed by the 1.0820/40 price zone.”