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  • The service sector in the U.S. stays strong according to the PMI data.
  • US Dollar Index slumps below 96.50 in the NA session.
  • ECB’s Smets says that they are confident about core inflation going up.

After dropping to a daily low at 1.1357 during the European trading hours, the EUR/USD pair staged a modest rebound in the second half of the day and turned positive above the 1.14 mark as the greenback came under a broad-based selling pressure in the last hours. As of writing, the pair was trading at 1.1402, adding 0.1% on a daily basis.

Earlier today, the data released from the euro area showed that the Sentix Investor Confidence slumped to 8.8 in November from 11.4 in October and fell short of the market expectation of 10.1 to weigh on the pair. Furthermore, the greenback started the week on a positive note following last Friday’s upbeat employment data from the U.S. and forced the pair to stay in the negative  territory.

With the US Dollar Index struggling to preserve its bullish momentum in the NA session, the pair gained traction and retraced its drop. Although today’s data from the U.S.   revealed that the business activity in the service sector continued to expand at a strong pace in October, the DXY slumped below 96.50 as falling  Treasury bond yields hurt the demand for the buck. At the moment, the 10-year yield was down 0.7% on the day at 3.191%.

Meanwhile,  Belgian central bank chief and the ECB Governing Council  member  Jan Smets said that it was important to get the nominal interest rates back to a higher level and added that he was confident about core inflation resuming to rise in the euro area to provide an additional boost to the shared currency.

Technical levels to consider

The initial resistance for the pair aligns at 1.1440 (20-DMA) ahead of 1.1500 (psychological level) and 1.1570 (100-DMA). On the downside, supports could be seen at 1.1360 (daily low), 1.1300 (Oct. 31 low) and 1.1235 (Jun. 5, 2017, low).