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  • US data shows larger-than-expected decline in international trade deficit
  • China’s Vice Premier will reportedly travel to US to sign phase-one deal.
  • US Dollar Index rebound loses steam ahead of 97 handle.

The EUR/USD pair rose to its highest level in more than four months at 1.1211 earlier in the day but struggled to preserve its bullish momentum. With the upbeat data from the US helping the greenback recover the losses it suffered against its major rivals earlier in the day, the pair touched a session low of 1.1182.  

US Dollar Index rebounds modestly

The US Census Bureau reported that the international trade deficit in November narrowed to $63.19 billion to come in better than the market expectation of $68.75 billion and helped the US Dollar Index rebound.

Additionally, the 10-year US Treasury bond yield rose sharply to provide an additional boost to the USD  after the  South China Morning Post reported that China’s Vice Premier Liu He will be travelling to Washington later this week to sing the phase-one of the trade deal. At the moment, the 10-year T-bond yield is up more than 3% on the day.  

Nevertheless, the pair retraced its slide following the initial reaction and was last up 0.17% on the day at 1.1195. Moreover, the US Dollar Index, which turned flat at 96.90 earlier in the hour, is now erasing 0.22% at 96.80.

Technical levels to watch for