EUR/USD finds support at 1.1010, rises toward 1.1050
- US Dollar losses momentum during the American session, DXY retreats toward 99.00.
- US data: February pending home sales rise above expectation, Dallas Fed Manufacturing shows record decline.
The EUR/USD bottomed around the 1.1010 area and as of writing it stands at 1.1040/45, down 90 pips for the day. The pair is about to post the first daily loss after rising during five consecutive days. The decline took place amid a rally of the US dollar across the board.
The greenback strengthened despite lower US yield and rising equity prices in Wall Street. The Dow Jones is up 2.20% and the Nasdaq 2.85%. The correlation between US yields and DXY did not work as usual on Monday. Over the last three hours, the 10-year yield rose from 0.65% to 0.69% while the DXY pulled back.
Data from the US came in mixed. Pending home sales in February rose 2.4%, above expectations of a 1.8% decline while the Dallas Fed manufacturing index plummeted to -70, a record low in March. On Friday, the official employment report is due.
Technical outlook
“The EUR/USD pair has retreated further from the 61.8% retracement of its March slide, and also pierced the 50% retracement of it, now the immediate resistance at 1.1065. The 4-hour chart shows that the pair remains capped in the short-term by a mild-bearish 100 SMA although the 20 SMA maintains its bullish slope, now crossing above the 200 SMA”, explained Valeria Bednarik, Chief Analyst at FXStreet.
The Momentum indicator is still heading south and approaching its 100 level, and RSI now flat around 54, suggesting that market players are not yet looking to re-buy the dollar massively, notes Bednarik.