EUR/USD Price Analysis: Euro pulls away from daily highs after US data.

• EUR/USD spiked to a three-day high on Monday, although it took a while to break above the 1.0600 level.
• Repeated failures near the 50-day SMA warrant caution before positioning for any significant gains.
• The break below the uptrend line from two weeks ago would change the bias in favor of the bearish traders.

The pair EUR/USD it gained traction for the second day in a row on Monday and rose to a three-day high, though it struggled to capitalize on the move.

A nice rally in US Treasury yields helped the dollar reverse an intraday drop to one-week lows. Furthermore, positive US durable goods orders offered additional support to the dollar and capped the EUR/USD pair just before 1.0600.

From a technical point of view, the level mentioned above coincides with the 50-day SMA and should act as a reference point. Sustained strength beyond this point would be seen as a new trigger for bullish traders and pave the way for an extension of the nearly two-week uptrend.

The EUR/USD pair could then accelerate the momentum towards the break of the 1.0650 horizontal support, now turned into resistance, before attempting to reclaim the 1.0700 level. The next major hurdle is near the 1.0745-1.0750 area, ahead of May’s high around the 1.0780-1.0785 area.

Meanwhile, the recent bounce from near the mid-1.0300, or low for the year, has occurred along an uptrend line. Such support, currently around the 1.0535-1.0530 area, should continue to protect the immediate downside, which if broken could trigger some technical selling.

The ensuing drop could drag the pair towards the key psychological level of 1.0500, which is closely followed by support near the 1.0480 area. A bit of follow-through selling would change the bias in favor of bearish traders and make the EUR/USD pair vulnerable.

4 hour chart

Technical levels