EUR/USD approaches 0.9600 lows as recovery loses momentum
- US Dollar is solid as markets fail to stage recovery.
- EUR/USD is hovering around 0.9620, far from the daily highs.
- Dollar overbought but not offering signs of a correction.
The EUR/USD is moving toward 0.9600 after the recovers from fresh multi-year lows faded. The euro could not hold above 0.9700 and started to decline as stocks in Wall Street printed fresh session lows.
Risk aversion prevails across financial markets supporting the dollar. In the US, the Dow Jones is down 0.61% and the S&P 500 declines by 0.40%. The Nasdaq is up 0.20%. Crude oil is erasing gains and metals are back into negative territory.
Economic data released in the US showed a decline in the Chicago Fed National Activity Index dropped more than expected to 0 from 0.08%. Earlier, IFO reported a decline in Sentiment Index in September.
The dollar remains firm across the board amid Fed rate hike expectations and risk aversion. The euro found some support from the rally in EUR/GBP that climbed to two-year highs.
Still looking to the downside
The recovery of the EUR/USD was short-lived and is approaching 0.9600. Below attention would turn to the cycle low at 0.9549. Despite oversold readings across charts, the negative momentum is solid with the pair still looking for support.
On the upside, if the euro consolidates above 0.9700 it could gain support from a more sustainable rebound in the very short term. The next strong resistance is seen at 0.9805.
Technical levels