EUR/USD rebounds from 1.1580 toward 1.1615

• US dollar losses momentum amid risk appetite, still supported by yields.
• US data surpasses expectations on Tuesday.
• EUR/USD holds onto daily losses, off lows.

The EUR/USD bottomed at 1.1580 and then bounced sharply rising back above 1.1600. It is hovering near 1.1605, down for the day but off lows. The rebound took place as stocks in Wall Street rise sharply.

The Dow Jones gains 1.39% and the Nasdaq 1.56%. The improvement in market sentiment weighed on the greenback that is down across the board during the American session. The yen is the worst performer among G10 currencies.

The greenback still shows signs of strength supported by higher yields. The US 10-year stands at 1.53%, the highest in five days. Economic data from the US lifted yields. The service sector IHS Markit and the ISM showed numbers above expectations. Regarding economic numbers, the focus now turns to labor market data. On Wednesday, the ADP employment is due and on Friday the Nonfarm payrolls.

Short-term outlook

From a technical perspective, the intraday bias is starting to favor the upside, with EUR/USD above the 20-hour moving average and after recovering 1.1600. The next resistance is seen at 1.1615 followed by 1.1640 (weekly high) and 1.1685.

A firm slide under 1.1585 should add bearish pressure to the EUR/USD, for a slide to 1.1570 initially that protects last week low of 1.1560.

Technical levels