EUR/USD erases losses and rises above 1.1750 as US dollar retreats

• DXY failed to hold onto gains, drops under 93.50 as US yields hit fresh lows.
• EUR/USD neutral for the day, capped by 1.1800 supported above 1.1720.

The EUR/USD pair rose from the 1.1720 area after the beginning of the American session and climbed to 1.1773, erasing daily losses. The euro is now marginally higher for the day, and it is consolidating after the correction from above 1.1900 to levels under 1.1700.

A retreat of the greenback across the board boosted EUR/USD. The US Dollar Index (DXY) is falling 0.1% at 93.45, after spending most of the day in positive territory. Lower US yields and higher equity prices weighed on the US dollar. The 10-year yield bottomed at 0.513%, the lowest since mid-March.

Economic data from the US came in better-than-expected. Factory Orders rose 6.2% in June while the ISM-NY reached 53.8 in July, considerable above the 15.8 expected. The reports did not provide support to the dollar.

Technical levels

The intraday tone turned positive for EUR/USD as it remains above the 20-hour moving average at 1.1765. The immediate resistance is seen at 1.1780 followed by Monday’s high at 1.1805.

While it appears to be too soon to consider the correction is over, the bearish momentum has clearly faded. A slide below 1.1745 could strengthen again the dollar, but a break under 1.1700 is needed to open the doors to more losses.