EUR/USD hits 1.2305 and retreats, USD remains under pressure

• EUR/USD jumped to 1.2305 but failed to hold near the top.
• Bearish pressure on USD eased during the last hour, still holds a negative tone. 

The EUR/USD pair jumped to 1.2305 amid a USD sell-off. After hitting a six-day high it pulled back and fell to 1.2270. As of writing it was trading at 1.2275/80, up 20 pips for the day. 

Despite rising more than 50 pips from the lows EUR/USD has been unable to hold on top of 1.2300 showing difficulties extending the rally. The retreat from the highs took place as the greenback moved off daily lows. Still the dollar was under pressure with the DXY headed toward the lowest close since December 2014. 

No particular event triggered the slide of the dollar during the American session. It was already weak and the latest round of US data failed to offer support. The Richmond Fed’s Manufacturing Survey dropped more than expected from 20 to 14, below the 19 of market consensus. At the same time, the Eurozone Consumers Confidence preliminary report surpassed expectation. The main index came in at 1.3 above the 0.6 expected and the 0.5 of the previous month. 

Tomorrow in the Eurozone, the key report will be the flash estimate of the PMIs and the event of the week will be on Thursday: the ECB meeting. No change in monetary policy is expected but Draghi’s testimony is likely to have an impact on the euro.  In the US, the next relevant report will be on Friday with the first reading of Q4 GDP. 

EUR/USD Technical levels 

To the upside, above daily highs, resistance might be seen at 1.2320 (last week high) followed by 1.2345 and 1.2385. On the flip side, immediate support lies at 1.2270 (US session low) and then at 1.2255 (20-hour moving average) and 1.2210 (weekly low).