- Euro up for the day versus US Dollar but far from the highest.
- Recovery from 11-month lows finds
resistance below the 20-day moving average.
EUR/USD is about to end the day hovering around 1.1700, with gains for the day, but far from the highs. Earlier today peaked at 1.1744, the highest in a week and then pulled back finding support at 1.1675.
The retreat from the highs took place amid a recovery of the US dollar across the board. Higher US yields (10-year rose to 2.92%, highest in a week) and on the back of some potential profit taking. EZ and US data had no relevant impact on Monday.
Despite trimming gains against the greenback, the euro is about to end the day higher versus the pound and the Swiss franc. EUR/GBP climbed more than 40 pips, approaching 0.8700 while EUR/CHF rose above 1.1550. Lower-than-expected EZ data had no impact on the common currency.
Technical outlook
EUR/USD is on its way to the highest daily close since May 24 but the recovery from multi-month lows appear to be losing strength. The up move from near 1.1500 ended near the 20-day moving average at 1.1760.
“The EUR/USD pair advanced briefly past the 1.1735 Fibonacci resistance but was unable to actually settle above the level. In the 4 hours chart, the pair is trading above a bullish 20 SMA, but below the 100 SMA, while the Momentum indicator lacks directional strength within neutral levels and the RSI heads lower at around 53, reflecting limited buying interest rather than suggesting increasing selling one”, said Valeria Bednarik, Chief Analyst at FXStreet.
The risk of a downward move will remain limited as long as the pair holds above the 1.1600 figure adds Bednarik, but warns that further gains are still uncertain particularly considering the pair is barely around the 23.6% retracement of its latest weekly slump.
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