EUR/USD rises further to one-week highs near 1.1770

• US dollar remains under pressure amid risk appetite.
• EUR/USD gains for the third consecutive day, extending recovery from 1.1662.

The EUR/USD broke above and climbed to 1.1764, reaching the highest level in a week. The pair is hovering around 1.1750/55, on its way to the third consecutive daily gain as it continues to recovery from multi-month lows.

The key driver in EUR/USD's up move continues to be a weaker US dollar across the board. The DXY is falling by 0.10%, under 93.00. The bias in the index still points to the upside, although the correction still shows momentum to go on. US yields are rising modestly, keeping USD losses limited. The 10-year stands at 1.28%, near the weekly highs.

Economic data released on Tuesday in the US showed a larger than expected decline in the Richmond Fed Manufacturing Index to 9 in August from 27. A different report showed New Home Sales rose 1% in July to an annual rate of 708K, above the 700K of market consensus. The numbers were ignored by market participants that have their eyes on Jackson Hole’s Symposium. On Friday, Fed Chair Powell will deliver a speech and could make an explicit QE tapering announcement.

Short-term outlook

The EUR/USD holds a bullish bias in the short-term, reaffirmed hitting levels above 1.1750. Above the next resistance stands around 1.1775, and then attention would turn to last week's top at 1.1800/05.

A slide below 1.1740 (20-hour SMA) would expose the daily low at 1.1726; the next decent support stands at 1.1700. A consolidation under 1.1700 would increase the bearish pressure.

Technical levels