- US Dollar retreats after US data, DXY falls to 96.80.
- EUR/USD rebounds, alleviate bearish pressure, heads for a small weekly loss.
The EUR/USD pair extended the recovery from weekly lows following the release of the US ISM Manufacturing report. It rose to 1.1167 and as of writing trades at 1.1165, modestly lower for the day, and forty pips above the daily low.
The rebound took place after the greenback pulled back across the board. Earlier today, tensions between Iran and the US sent the US dollar to the upside. EUR/USD bottomed at 1.1123 before bouncing to the upside.
The ISM manufacturing index came in at 47.2 for December, below expectations of a reading of 49.0. According to analysts at Wells Fargo the report signals that industrial activity shrank in each of the last five months of the year. “Even worse is the fact that this marks the lowest headline for the ISM since the recession. Various subcomponents also plumbed lows that haven’t been touched in a decade, including most notably employment which fell to 45.1.”
The report weighed on the US dollar. The DXY moved of highs and dropped to 96.80. US yields turned again to the downside approaching daily lows. The 10-year stands again at 1.80%; before the report was testing 1.84%.
On a weekly basis, EUR/USD is trading just a few pips below the level it has a week ago. Over the week, it reached monthly highs above 1.1200 but failed to hold. Still, before the week is over, the Federal Reserve will release the minutes of its latest meeting.
Technical levels
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