EUR/USD rebounds further from monthly lows to the 1.1750 zone as the DXY tumbles

US dollar drops further across the board, reversing Wednesday’s gains.
EUR/USD eyes 1.1750, turns positive for the week.
US economic data below expectations on Thurdsay.

The EUR/USD broke above 1.1735 and climbed to 1.1749, reaching a fresh daily high, on the back of a weaker US dollar that erased post-Fed meeting gains. The euro is back near the 1.1750 key short-term resistance.

The greenback is down across the board except versus the yen. The Japanese currency is affected by risk appetite and higher US yields. The Dow Jones is up by 1.52% and the Nasdaq gains 1.08%.

USD gives ups Fed’s gains

The dollar on Wednesday rose following the FOMC meeting. Powell opened the doors to a tapering announcement at the next meeting. “We think if job growth improves to around 500k this month, the Fed will pull the trigger on tapering. Current Bloomberg consensus for September NFP is 513k vs. 235k in August”, explained analysts at Brown Brothers Harriman.

Economic data released on Thursday in the US came in below expectations, with initial jobless claims rising unexpectedly and the flash PMI Markit falling to the lowest in months. The greenback weakened following the reports.

Looking again at 1.1750

The EUR/USD is likely to test again the 1.1750 area that capped the upside several times during the current week. A confirmation above could add further strength to the bullish move. The next resistance stands at 1.1780 followed by 1.1800. On the downside, a slide below 1.1715 would remove the positive intraday outlook. Support levels below might be seen at 1.1680 and 1.1660.