EUR/USD trims losses on US Dollar retreats

• Spot rose back above 1.1600 on USD slide. 
• EUR at daily lows vs. CHF, GBP
• Price moved in 45-pip range. 
• Data ahead: EZ retail sales 

The EUR/USD pair moved off 14-week low and rose above 1.1600 supported by a decline of the US Dollar. The Dollar Index is trading at daily low at 94.65 as it retreats after being unable to break above 95.00. The greenback lost strength amid a rally in crude oil prices (WTI up 2.95%) and a decline in US bond yields. The 10-year yield fell to 2.31%, the lowest since October 20. 

EUR/USD recovered during the American session from 1.1580 and at the moment of writing trades at 1.1610/15, flat for the day. Despite the up move,  the euro remains among the weakest currencies of the day. While EUR/USD is struggling to move off daily lows, GBP/USD is at 2-day highs, and USD/JPY stands at lows under 113.80. 

The euro remains weak in the market as it has been the case since the last ECB meeting. Today economic releases included the Eurozone PMI (final reading) and PPI, both showed higher-than-expected numbers, but the common currency failed to benefit. On Tuesday, EZ retails sales data will be released while in the US no relevant reports are due. 

Technical outlook 

Valeria Bednarik, Chief Analyst at FXStreet points out that the last week low at 1.1574 is still the level to break to confirm a new leg lower that can extend down to 1.1460. She adds that the 4 hours chart shows that the price remains below a bearish 20 simple moving average, while technical indicators stand within bearish territory, partially losing their bearish strength but far from signaling an interim bottom.

“The pair would need to firm up beyond the 1.1660/70 level to shrug off the negative stance, something that looks quite unlikely for the time being, and without a strong catalys”, concludes Bednarik.