EUR/USD pulls back from 1.0600 and falls to multi-day lows near 1.0500

• The dollar gains momentum in the American session.
• The euro makes new lows against the dollar, the Swiss franc and the British pound.
• Stocks Erase Wall Street Gains, US Yields Off Highs.

The EUR/USD continued to fall and bottomed out at 1.0501, the lowest level since Thursday. She then cut losses and moved up to 1.0530. The move lower came amid a stronger US dollar across the board.

The greenback gained ground as Wall Street indices turned negative. The Dow Jones fell 0.51% and the Nasdaq 1.74%. Yields in the US fell, with the 10-year yield at 3.20% and the 30-year yield at 3.31%.

US economic data disappointed expectations. The Conference Board consumer confidence index fell to 98.7 in June, the lowest level in 16 months. The Richmond Fed manufacturing index fell to -19 in June from -9, against the market consensus of -11. The S&P/Case Shiller price index rose 1.6% in April. The figures did not affect the dollar.

The euro is among the worst performers of the American session. EUR/CHF fell to test last week’s lows near 1.0050 and EUR/GBP fell back to 0.8620. The common currency did not benefit from comments from European Central Bank officials.

The ECB’s annual forum in Portugal will have its last day on Wednesday. A panel discussion will include Lagarde (ECB), Powell (Fed) and Baily (BoE).

Short term outlook

EUR/USD is moving away from the lows and is back above 1.0530. The pair is likely to continue moving sideways between 1.0500 and 1.0600. Early on Tuesday the Euro traded above 1.0600 but was again rejected from those levels; it needs to consolidate above those levels to open the doors to more gains.

Immediate resistance is seen at 1.0550 (20 SMA on the 4 hour chart); while below EUR/USD could retest 1.0500. The next level to watch is last week’s low at 1.0467.

Technical levels