- US dollar trims gains across the board amid low volatility.
- EUR/USD falls modestly, as the euro’s recovery lacks persistence.
The EUR/USD bottomed at 1.1721 and then bounced to the upside trimming losses. It rose back above 1.1730 on a quiet session. It still remains in negative territory but off lows dollar’s momentum evaporates.
The greenback peaked after the release of US economic data. Initial jobless claims dropped as expected to 375K while continuing claims fell under 3 million for the first time since the pandemic. In a different report, inflation numbers came in above expectations. The Producer Price Index rose 1% in July, against market consensus of a 0.6% gain.
During the American session, the dollar lost momentum and pulled back, on a low volatility session. The DXY is still up for the day, but it failed to recover 93.00. The 10-year yield stands at 1.354%, up 1.50% for the day and off highs.
Levels to watch
The EUR/USD moved in a 25-pips range with a bearish bias. The 1.1720 area offers support. Below that level, attention would turn to the critical 1.1700/05. A break lower could trigger an acceleration and also volatility.
On the upside, the recovery of EUR/USD faces resistance at 1.1750. If the euro rises above it could gain momentum. The next resistance stands at 1.1775.