EUR/USD trims gains and falls towards 1.0400 on a quiet day

• US markets are closed, price action is limited.
• The US dollar recovers and turns positive.
• EUR/USD fails to hold gains, remains vulnerable.

The EUR/USD it fell from 1.0461 to 1.0416, approaching the low of the Asian session as the US dollar regains strength. Volatility remains limited amid low volume. US markets are closed on Monday.

Low volume on US Independence Day

EUR/SUD shows no surprises in a quiet financial market session amid a US holiday. The pair approached 1.0470 early on Monday, but lost momentum and pulled back to closing levels on Friday.

The key factor has been the US dollar. After spending the day in negative territory, DXY turned positive, breaking above 105.00 again. Wall Street futures were slightly lower, while European markets were mixed.

Eurozone economic data showed the producer price index rose 0.6% in May, below the 1% market consensus. The annual rate fell from 37.2% to 36.3%, a level that continues to justify the rate hike by the European Central Bank. Sentix Investor Confidence fell from -15.8 to -26.4 in July.

Business will return to normal on Tuesday. The next key date in the United States will be on Wednesday with the FOMC minutes from its last meeting. The official employment report will be published on Friday.

looks vulnerable

EUR/USD has failed to recapture 1.0470 and remains vulnerable. The lack of strength in the recovery keeps the door open for a decline to 1.0400. Below, the next support is 1.0380, the last defense of the year-to-date low, 1.0350.

If the euro breaks above 1.0470, it could gain momentum and extend the move higher to 1.0490, easing bearish pressure. At 1.0520, wait for the 20-day simple moving average.

Technical levels