The euro is about to post the first daily gain against the US dollar after falling during the previous four trading days. EUR/USD rebounded from 1-month lows at 1.0520 and reached levels on top of 1.0600 but near the end of the session, it was trading at 1.0580/90, slightly above yesterday’s closing price.
The rally that took place during the American session was boosted by a decline of the US dollar. The greenback weakened despite the release of higher-than-expected inflation and retail sales data.
“Strong US data pushed US interest rates and the US dollar higher but the reaction was not sustained. Equities made fresh record highs”, said Imre Speizer from Westpac. The US dollar index reversed after reaching 101.70 (1-month high) and it was about to end lower for the day, around 101.15.
EUR/USD Technical outlook
The late recovery was not enough to revert the negative tone of the pair, as in the 4 hours chart, the recovery stalled right around a still bearish 20 SMA”, said Valeria Bednarik, Chief Analyst at FXStreet.
She noted that additional gains beyond 1.0625, the immediate resistance, could result in a recovery up to the 1.0660 region, en route to the critical 1.0705 price zone.