- EUR/USD staged a rebound after dropping to fresh two-month lows.
- US Dollar Index pared daily gains in late American session.
- Recovery witnessed in US stocks seems to be weighing on USD.
The EUR/USD pair slumped to its lowest level in two months at 1.1626 on Thursday but reversed its direction in the late American session. As of writing, the pair was up 0.13% on a daily basis at 1.1674.
DXY loses traction on Wall Street rebound
Earlier in the day, the broad-based USD strength continued to weigh on EUR/USD amid a lack of significant macroeconomic data releases from the euro area. The US Dollar Index (DXY), which tracks the greenback’s performance against a basket of six major currencies, rose to its highest level since late July at 94.59 in the second half of the day.
However, a decisive rebound witnessed in Wall Street’s main indexes caused the USD to lose interest as a safe-haven and allowed EUR/USD to retrace its fall. At the moment, the S&P 500 Index is up 1.23% on the day and the DXY is posting small daily losses near 94.30.
Meanwhile, the data from the US showed on Thursday that weekly Initial Jobless Claims increased by 4,000 to 870,000 in the week ending September 19th and New Home Sales rose by 4.8% in August to beat the market expectation for a decline of 1%. Nevertheless, these figures had little to no impact on EUR/USD’s movements.
There won’t be any macroeconomic data releases featured in the European docket on Friday. Later in the day, the US Census Bureau will release the Durable Goods Orders data
Technical levels to watch for
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