EUR/USD retreats from monthly highs to 1.1740

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  • EUR/USD trims gains but still holding above key technical levels.
  • DXY sees some stabilization after sharp slide, the outlook remains negative.

The EUR/SUD pair is posting important gains and is headed toward the highest close in at least two months. However, after the beginning of the US session, the bullish momentum eased.

Earlier today the pair jumped and reached at 1.1775, the highest level since July 9. It rose amid a decline of the greenback across the board. The US Dollar Index broke below 94.00 for the first time in two months.

The slide of the USD took place even amid higher US yields and also despite upbeat economic data. Initial jobless claims fell to 201K, its lowest level since November 1969. The Philly Fed manufacturing index rose from 11.9 to 22.9. The positive data was partially offset by existing-home sales that stayed flat in August against expectations of a 0.3% gain. The overall tone of the greenback versus majors remains negative.

Levels to watch

To the downside, the immediate support is seen at 1.1740 followed by the 1.1720 area (Sep 14 & 18 high) and 1.1660 (uptrend line). On the upside, the first resistance could be seen at the daily high at 1.1775, followed by the 1.1800 zone and 1.1850.

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