- US Dollar Index drops below 99.50 in American session.
- Sour market mood doesn’t allow the pair to rise sharply.
- Pair is likely to stay confined in a range on Tuesday.
The EUR/USD pair gained more than 100 pips last week and advanced to its highest level in 10 days at 1.0968 on Monday. However, the pair lost its traction and dropped below 1.09 during the American session as the shared currency struggled to find demand in the risk-off atmosphere.
With the greenback coming under renewed selling pressure in the last hour, the pair recovered a small portion of its daily losses and was last seen trading at 1.0923, erasing 0.12% on a daily basis.
USD recovery remains shallow
The Federal Reserve on Thursday announced that it has taken additional steps to provide up to $2.3 trillion in loans to negate the impact of the coronavirus outbreak on the economic activity and triggered a USD selloff. The US Dollar Index (DXY), which tracks the greenback’s performance against a basket of six major currencies, lost nearly 1% in the second half of the week to close below 99.50.
Risk aversion at the start of the week helped the USD find demand With the DXY spending the majority of the day above 99.50. Nevertheless, a sharp upsurge witnessed in gold prices and a lack of fundamental drivers seem to be keeping the USD’s gain in check. At the moment, the DXY is down 0.1% on the day at 99.38.
There won’t be any significant macroeconomic data releases on Tuesday and the pair is likely to continue to react to changes in USD’s market valuation and technical triggers.
Key levels to watch for
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