- EUR/USD corrects lower, but support emerged near 1.1700.
- DXY regains some composure and eyes the 94.00 mark.
- US Consumer Confidence next of relevance in the calendar.
The rally in the single currency seems to have entered into a corrective phase, with EUR/USD losing ground and re-testing the 1.1700 neighbourhood, or daily lows.
EUR/USD offered on USD-recovery
The greenback appears to have regain some composure on turnaround Tuesday, motivating the US Dollar Index (DXY) to trade closer to the key barrier at 94.00 the figure and triggering a (healthy) move lower in EUR/USD from overbought levels.
On the macro view, traders’ sentiment appears to be biased towards the safe haven universe, with the Japanese yen and the Swiss franc also advancing modestly on Tuesday. The broad scenario, however, looks unchanged and keep favouring the riskier assets despite the ongoing (and expected) knee-jerk.
Later in the NA session, the Conference Board’s Consumer Confidence will be in centre stage seconded by the S&P/Case-Shiller Index.
What to look for around EUR
EUR/USD advanced to levels last seen in June 2018 near 1.1780 on Monday, confirming once again the solid momentum around both the single currency and the rest of its risky peers. The sharp move up, while largely triggered by dollar-selling, has found extra sustain in auspicious results from the domestic docket, in turn supporting further the view of a strong economic recovery following the coronavirus fallout. Also lending wings to the momentum around the euro, the recently clinched deal on the European Recovery Fund helped putting political fears within the region to rest (for now), while the solid position of the current account in the region adds to the rally.
EUR/USD levels to watch
At the moment, the pair is losing 0.17% at 1.1730 and faces immediate contention at 1.1495 (monthly high Mar.9) seconded by 1.1448 (50% Fibo of the 2017-2018 rally) and finally 1.1422 (monthly high Jun.10). On the other hand, a breakout of 1.1781 (2020 high Jul.27) would target 1.1815 (monthly high Sep.24 2018) en route to 1.1852 (monthly high Jun.14 2018).
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