EUR/USD rises back to 1.1600 as US dollar retreats

• EUR/USD erased daily losses after the US dollar lost strength during the US session.
• Euro flat for the day against the dollar, still near 2018 lows.

The EUR/USD pair bottomed earlier at 1.1571 but after the beginning of the US session turned to the upside, boosted by a retreat of the US dollar. Recently reached at 1.1608, a fresh session high. As of writing it was trading around 1.1600, at the same level it closed yesterday.

The US Dollar Index was also flat. The DXY failed to hold to gains and pulled back from 95.40 to 95.15. The retreat of the greenback took place also amid a decline in US bond yields. Regarding the euro, it received some support form the rally in the EUR/GBP pair that climbed above the psychological area of 0.9000.

As most crosses, EUR/USD so far has traded in a modest range, on a day without relevant economic reports from the US. Attention was focused on commercial tensions between the US and China and also on sanctions to Iran. On Thursday, producer price data is due in the US and on Friday, July’s CPI.

Levels to watch

To the upside, resistance levels might be seen at 1.1630, 1.1665 and 1.1700 (psychological and short-term downtrend line). On the downside, support could be located at 1.1570/75 (Jul 19 low), 1.1550 and 1.1530 (weekly low).