- US Dollar corrects lower after rising during four consecutive days.
- EUR/USD rebounds back above the 20-day moving average.
The EUR/USD pair rose further after the beginning of the American session and climbed to 1.1269, reaching the highest level since June 17. The move higher gained speed after breaking the 1.1225 resistance boosted by a weaker US dollar.
Dollar drops, EUR/USD up
The US Dollar Index (DXY) is correcting lower after rising during four consecutive days and is falling 0.55%, the worst performance in more than a week. The DXY dropped toward the 97.00, retreating further from the 20-day high it reached on Friday at 97.72.
Lower US yields weighed on the US dollar. The 10-year yield fell to 0.676%, the lowest level since June 15. In Wall Street, the Dow Jones is rising 0.45% and the Nasdaq 0.80%. Risk appetite is also weakening the greenback, that with the Japanese yen are the worst performers.
Economic data from the US came in mixed, with the Chicago Activity Index rising above expectation and Existing Home Sales falling much more than expected. In Europe, the Consumer Sentiment Index recovered from -18.8 to -14.7, probably boosted by the reopening of the economies and monetary and fiscal stimulus. The European recovery fund for countries hit by the coronavirus is not ready yet as negotiations continue to take place.
“Since the good news on the EU recovery fund, Euro denominated risk assets have traded much more robustly, and although the size of the package isn’t ‘blockbuster’, it’s certainly a step in the right direction for European policy and growth. In essence, EA ‘break-up’ risk premia has now markedly been reduced and may support EUR over the medium term”, explained analysts at Citibank.
Technical levels
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