- US dollar trims losses across the board, DXY back below 96.00.
- Wall Street is trading sharply lower, but far from lows.
- EUR/USD recovers and returns to the recent range.
The EUR/USD fell to 1.1289, reaching the lowest level since January 10, and then recovered. It is back above 1.1320, still in negative territory but far from lows and again above the critical 1.1300 zone.
If the pair manages to hold above 1.1300 it would stay in the current range with resistance at 1.1350 (horizontal level and 20-day moving average). A daily close clearly below 1.1300 should increase bearish pressure, targeting 1.1270.
The rally took place as US stocks moved off lows and DXY moved off weekly highs. The index reached a high of 96.12 and is back below 96.00. Still, caution and risk aversion dominate the financial markets, but there have been some improvements in recent hours. Metals and even cryptocurrencies trimmed losses.
The euro has been among the best performers in recent hours. It erased losses against the Swiss franc with EUR/CHF rising from 1.0295 to 1.0350 and hit new weekly highs against the pound as EUR/GBP clings to 0.8400.
Ahead of the key event of the week, the FOMC meeting, US data released on Monday disappointed expectations with Markit Manufacturing and Services PMI at 50.9 and 55 respectably, below the 55 and 56.7 market consensus .
Technical levels
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