- The dollar falls across the board amid risk appetite and falling Treasury yields.
- US ISM manufacturing index disappointing expectations in September.
- EUR/USD maintains a bullish tone, remains in the same range.
The EUR/USD found support above 0.9750 and rose during the American session to 0.9844, marking a new daily high. The pair finally got some boost from the weakness of the US dollar.
DXY posted a new weekly low at 111.47 and is hovering around 111.65. The dollar is falling across the board, weakened by several factors, including the rally in Treasuries. The 10-year Treasury bond yield has bottomed out at 3.57%, moving away from the 4% zone where it traded a few days ago. European yields also fell on Monday.
After a cautious opening, share prices in Europe finally turned positive. The DAX finished with a gain of 0.77% and the CAC 40 rose 0.55%. On Wall Street, the Nasdaq is up 1.39% and the Dow Jones is up more than 2%. Commodities rise strongly on Monday.
US economic data came in below expectations as the ISM manufacturing index came in at 50.2 in September, down from 52.8 in August and 52.2 from the market consensus. It was the lowest reading in more than two years.
Dollar weakness has so far been unable to push EUR/USD above the 0.9850 area, a critical near-term resistance zone. A firm break above would reinforce the euro’s recovery from the multi-year low reached last week, targeting first 0.9870 and then the 0.9910 resistance zone.
A drop below the 0.9750 area (daily low and 20 SMA on the 4h chart) should weigh on the Euro. Support levels are placed at 0.9730, followed by 0.9700 and 0.9670.
Technical levels
Source: Fx Street
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