EUR/USD hits 4-week highs at 1.1732 and retreats modestly after US data

• EUR/USD losses momentum above 1.1730 and pulls back following consumer confidence data.
• Euro heads for eighth daily gain out of the last nine days against the US dollar.

The EUR/USD pair rose further after the beginning of the US session on the back of a slide of the US dollar. It printed a fresh 4-week high at 1.1732 and then pulled back to 1.1700. It managed to hold above and as of writing was trading at 1.1715/20, up 40 pips for the day.

The greenback trimmed losses after the release of the Conference Board's August consumer confidence index that jumped to 133.4, against expectations of a modest slide. The index reached the highest level in 18 years. The US Dollar Index climbed from the lowest since July 31 at 94.45 to 94.65.

Despite the retreat, EUR/USD momentum still points to the upside. The economic data limited move higher but so far, it has not changed the intaday trend.

Levels to watch

Yesterday, EUR/USD broke a downtrend line from June highs and posted a daily close above signaling more gains ahead. Today, its headed for the highest close in a month and a test of July highs at 1.1785/90 seems likely. A break higher could open the doors for a bullish extension.

To the downside, support levels might be located at 1.1660, 1.1640 and 1.1595. On the upside, resistance could be seen at 1.1745, 1.1790 (Jul 9 high) and 1.1830.