- EUR/USD starts new week on a firm footing.
- USD struggles to find demand as risk flows continue to dominate markets.
- US ISM Services PMI registered its highest reading in March.
The EUR/USD pair fluctuated in a tight range around mid-1.1700s in the first half of the day on Monday but gained traction with the greenback coming under strong selling pressure during the American trading hours. After reaching its highest level since March 25 at 1.1840, the pair has gone into a consolidation phase and was last seen gaining 0.42% on the day at 1.1812.
DXY slumps to 92.50 area
Friday’s impressive jobs report from the US, which showed that Nonfarm Payrolls (NFP) in March surged by 916,000, allowed risk flows to dominate the financial markets at the start of the week.
Reflecting the risk-positive market environment, the Dow Jones Industrial and the S&P 500 indexes both opened at fresh record highs following the Easter holiday. Consequently, the USD struggled to find demand and the US Dollar Index (DXY) turned south. At the moment, the DXY is losing 0.46% at 92.58.
Furthermore, the ISM reported on Monday that the business activity in the US service sector expanded at its strongest pace on record in March with the Services PMI jumping to 63.7 from 55.3 in February. This reading beat the market expectation of 58.5 by a wide margin and provided an additional boost to risk sentiment.
On Tuesday, the Sentix Investor Confidence and February Unemployment Rate will be featured in the European economic docket. Later in the day, the IBD/TIPP Economic Optimism from the US will be looked upon for fresh impetus.
Technical levels to watch for
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