EUR/USD finds some resistance before 1.1800, US dollar remains under pressure

• US dollar holds onto losses across the board, bearish trend intact.
• EUR/USD heads for sixth consecutive gains, highest close since September 2018.

The EUR/USD rally lost some momentum over the last hours, but it remains intact. The euro peaked at 1.1781 after the beginning of the American session, and then pulled back finding support above 1.1740. It is approaching the daily top again as the US dollar holds onto losses across the board.

The broad-based weakens of the US dollar explains Monday’s rally in EUR/USD. The euro is rising for the sixth day in a row, after gaining speed at the beginning of the week. The US Dollar Index tumbles more than 0.6%, to the lowest in two years, now at 93.60.

The decline of the greenback is offsetting all other headlines. On Wednesday, the Federal Reserve will announce its decision about monetary policy. No change is expected but what the FOMC says will be relevant amid growing concerns about the US economic recovery. Otherwise, the euro is still benefiting from last week’s European Union deal regarding the recovery fund.

EUR/USD has risen almost five hundred pips since July 10. After such a rally, some analysts start showing doubts about how far it could go without a significant bearish correction. “Given concerns over a second wave of coronavirus and fears about what that could do to the global economy, there is risk that the recent rush to unload USDs may be extending too far. We see risk of a pullback towards the EUR/USD1.16 area in the weeks ahead”, says Rabobank analyst.