EUR/USD erases losses as USD retreats

The US dollar weakened across the board during the American session and pushed EUR/USD to the upside. At the moment, the pair trades at 1.1885, at the same level it closed yesterday. 

The pair bottomed after the release of the US personal income and spending report at 1.1821, the lowest in six days. It found support and during the last hours rose more than 50 pips. Regarding data, attention now turns to tomorrow’s NFP report. 

“Overall, the dominant bullish trend remains firmly in place, with the current interruption seen as temporal. Payrolls, however, could be a game changer. An in-line with expectations headline, but a miss in wages' gains will likely result in an upward move for the pair, but upbeat numbers all around could push it lower”, said Valeria Bednarik, Chief Analyst at FXStreet.

EUR/USD Levels to watch 

The rebound from 1.1820 was capped slightly below 1.1900. Price is back above the 20-hour moving average. The intraday tone has improved for the euro but it needs to hold on top of 1.1880 to keep the momentum. A break above 1.1900 would add more strength to the European currency. 

Still some bearish pressure in favor a continuation in the correction is present in EUR/USD, however, it is rebounding from a strong horizontal support: the 1.1820/30 area, located slightly above the 20-day moving average. That level appears to be critical: a break lower could clear the way for a USD rally while on the opposite direction, if it holds above, the bullish perspective would remain intact.