- The euro rises for the first time in five days against the dollar.
- Improving risk sentiment weighs on the DXY.
- EUR/USD is up more than 50 points on the day.
The pair EUR/USD is having the best day so far since February 1 on Monday, buoyed by a weaker US dollar across the board on the back of an improvement in risk sentiment and a pullback in Treasury yields. The pair is trading near 1.0615 after previously touching 1.0532, its lowest level in seven weeks.
Economic data released Monday in the US showed a larger-than-expected decline in durable goods orders. The main data fell 4.5%, versus expectations for a 4% decline. Most of the details in the report were positive. “The drop in durable goods in January was entirely due to a reversal in aircraft orders, with core capital goods orders posting the biggest rise in five months. The durable goods data thus adds to a series of strong economic data for January and suggest that while manufacturing activity may weaken further, it is not collapsing,” Wells Fargo analysts said.
According to another report, pending home sales rose 8.1% in January, surprising market participants who had expected an increase of around 1%. Compared to a year ago, sales fell 24.1%.
The US dollar weakened on the economic data while, at the same time, stock prices on Wall Street continued to rise. The SP500 is up 1.13% and the Nasdaq is up 1.42%. Stocks are recovering after the worst week in two months.
US yields are down slightly on the day. Treasury Bonds recovered ground at the beginning of the American session. The 2-year US bond yield peaked at 4.85% (the highest level since November) and returned below 4.80% at the time of writing. The pullback in US yields is helping EUR/USD rally north, while the DXY falls more than 0.55%.
EUR/USD breaks above 1.0600 again
The pair posted a fresh daily high at 1.0610 and is showing the best performance in weeks. The euro is breaking a four-day losing streak.
The Euro is testing levels above 1.0600 and is starting to look at the next relevant resistance area at 1.0630 as it maintains an intraday bullish bias. A pullback below 1.0585 would turn the intraday trend negative again.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
