EUR/USD approaches 1.0500 after failing to ride above 1.0600

• The dollar gains momentum after the opening of Wall Street.
• The euro extends decline against the Swiss franc and erases gains against the pound.
• EUR/USD next support at the 1.0510 area.

EUR/USD extended the pullback after failing to hold above 1.0600 and fell as low as 1.0515, hitting the lowest level in two days. The pair remains near the lows, against a stronger dollar.

The greenback It gained momentum after the opening of Wall Street and despite the fact that the shares show rises, although they have moved away from the maximums. Nor did the US economic data below expectations stop the strength of the dollar.

The Conference Board Consumer Confidence Index fell to 98.7, below the 100.4 expected. In turn, the Richmond Fed manufacturing index fell from -9 to -19, well below the market consensus of -11.

With respect to eurothe common currency was not supported by the continuity of statements by officials of the European Central Bank about a rate hike at the next meetings. This occurs in the context of the annual ECB forum that takes place in Portugal. On Wednesday they will share a honeycomb there Lagarde (BCE) and Powell (Federal Reserve).

Recovery at risk

The EUR/USD now has a negative intraday bias and is yet to find support. Below 1.0510 a test of 1.0500 would be expected; Below is last week’s low around 1.0470. A consolidation below the latter would increase bearish pressures.

To the upside, now 1.0550 is the first major resistance (4-hour 20 moving average) followed by 1.0570. Then the 1.0600 zone appears again, which is key. The Euro again failed to assert itself above, which is needed to enable further gains.

Technical levels