EUR/USD trims losses, remains near multi-month highs

The euro reversed its intraday trend during the American session against the US dollar. EUR/USD bottomed at 1.1233 and then rebounded. Recently it broke above 1.1250 and currently is challenging the 20-hour moving average around 1.1250/55. A consolidation on top would, could add support to the euro. 

The euro held all day above 1.1200 and still remains near the multi-month high it reached on Friday at 1.1284. The main trend continues to favor the common currency. 

Economic data released today had a minor impact on the market. In the Eurozone, the Markit Composite index was unchanged from the flash reading and stood at 56.8. In the US, nonfarm productive did not change during the first quarter while labor cost rose at an annual rate of 2.2% below the 2.5% expected. On another report, the ISM non-manufacturing index fell to 56.9 from 57.0. The last report was factory order that dropped 0.2% in April. On Tuesday the Eurozone retail sales report will be released. The key event will be on Thursday with the European Central Bank meeting. 

Technical outlook 

Valeria Bednarik, Chief Analyst at FXStreet pointed out that in the short-term, EUR/USD presents a neutral-to-bullish stance, hovering a few pips above its 20-day simple moving average and far above the bullish 100 and 200-day averages. 

“The risk remains towards the upside, with a break beyond 1.1300 still required to confirm a new leg higher, while a break below 1.1180 will probably see a downward corrective extension down to the 1.1120 region”, said Badnarik.