EUR/USD down for the second day in a row, consolidates losses above 1.1350

EUR/USD is moving sideways around daily lows. The pair bottomed during the American session slightly above 1.1350 and since then it has been moving between the lows and 1.1370, consolidating daily losses. 

The pair moved all day with a bearish bias. At the beginning of the week, the greenback continued with the recovery that started on Friday. Eurozone PMI and unemployment data had no impact on the market while later, the US ISM manufacturing report gave further strength to the US dollar. The index rose to 57.8, the highest since August 2014, surpassing expectations. 

US: Economic activity in the manufacturing sector expanded in June - ISM

Eurozone: Stable unemployment data - ING

The greenback is up for the second day in a row. Measured by the US Dollar Index reached the highest level since Wednesday. It climbed to 95.95, starting the second half of the year on a strong note after posting last week the lowest close since September. 

EUR/USD outlook 

The euro is falling for two consecutive days.  The last time it did that, was back on June 8 & 9. The correction that is underway, takes place after a rally of 320 pips. 

Last week the pair peaked at 1.1447, the highest in a year. Today it failed to hold above 1.1400 and accelerated the decline under Friday’s low at 1.1390. The short-term tone still favors the downside. A break below 1.1350 would open the doors for an extension of the correction. Two strong support levels are located at 1.1330 and 1.1295. 

For the coming hours, a bounce above the 20-hour moving average, currently at 1.1380 would remove the bearish pressure, while a consolidation on top of 1.1390 could add more momentum to the euro. Above resistance levels area seen at 1.1415 and 1.1425 (Jul 3 high).