EUR/USD back below 5-DMA as USD recovers Trump-led losses

The EUR/USD pair is back in the red zone and meanders near daily lows, as the US dollar staged a solid comeback from Trump’s speech induced declines, lifting the USD index back near five-day highs of 101.57.

The pick-up in buying interest behind the greenback across the board is mainly driven by resumption of the ongoing rally in the treasury yields, as markets continue to cheer increased odds of a March Fed rate hike, following upbeat US GDP numbers and hawkish comments by Fed officials Kaplan, Williams and Dudley.

Looking ahead, markets will continue to assess Trump’s rhetoric, as attention turns towards fundamentals, with the final manufacturing PMI reports up on the sleeves from the Euro land, followed by the German Prelim CPI data and US dataflow.     

EUR/USD Technical Levels

In terms of technicals, Omkar Godbole, Analysts at FXStreet notes, “A break above 1.06 (zero figure) would expose 1.0642 (38.2% of 1.0341-1.0829) and 1.0677 (Feb 17 high). On the downside, support is seen at 1.0577 (5-DMA) and 1.0565 (previous day’s low), under which a major support is seen at 1.05 (zero figure). “