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EUR/USD: Recovery fizzles near Friday’s high

FXStreet (Mumbai) - The overnight recovery in the EUR/USD pair from multi-month lows lost steam near Friday’s high at 1.0640. The price retreated slightly and now hovers well above the 10-DMA support located at 1.0614.

EUR/USD stuck in tight range

Currently, the EUR/USD pair trades -0.11% lower at 1.0622, having posted fresh session highs at 1.0637 in opening hours. The main currency pair paused its previous pullback and turned lower this session as the greenback jumped back on the bids against its major peers after the recent corrective slide.

On Tuesday, the EUR/USD pair rebounded from multi-month lows reached near 1.0560 region and witnessed an almost 80-pips recovery after the US dollar weakened across the board on the back of technical correction. Adding to the USD weakness, the latest US ISM manufacturing PMI index came in at the lowest since 2009 and entered contraction.

Moreover, markets viewed that further ECB easing this week has been already priced-into the EUR/USD decline seen over the past week and hence, locked-in gains on a short-covering rally.

Meanwhile, markets now await the Euro zone CPI and the US ADP employment report in the day ahead for fresh incentives while still digesting the upbeat EZ PMIs and jobs data released yesterday. Also, Fed Chair Yellen’s speech at two separate events will be closely heard.

EUR/USD Technical Levels

The pair hovers above 1.06 handle, with the immediate support seen at 1.0598 (5-DMA). Selling pressure will intensify below the last, dragging the pair towards 1.0558 (Nov 30 Low). While to the upside, the next hurdle in sight is located at 1.0640 (Nov 27 High) and from there to 1.0664 (20-DMA).

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