EUR/USD rises to test last week's highs amid a weaker dollar

• Us dollar tumbles across the board amid risk appetite, lower US yields.
• US ISM Manufacturing Index below expectations in September.
• EUR/USD holds a bullish tone, in ranges.

The EUR/USD found support above 0.9750 and rose during the American session to 0.9844, hitting a fresh daily high. The pair finally received some impulse from a weak US dollar.

The DXY printed a new weekly low at 111.47 and it is hovering around 111.65. The greenback is falling across the board weakened by several factors, including a recovery in Treasuries. The US 10-year yield bottomed at 3.57%, moving further away from the 4% area it traded just a few days ago. European yields are also lower on Monday.

After a cautious opening, equity prices in Europe finally turned positive. With the DAX ending with a 0.77% gain and the CAC 40 up by 0.55%. In Wall Street, the Nasdaq rises by 1.39% and the Dow Jones climbs by more than 2%. Commodity prices are sharply higher on Monday.

US economic data came in below expectations with the ISM Manufacturing Index at 50.2 in September down from 52.8 in August and below the 52.2 of market consensus. It was the lowest reading in over two years.

The weaker dollar has been unable so far to boost EUR/USD above the 0.9850 area, a critical short-term resistance area. A firm break above would strengthen the recovery of the euro from the multi-year low it hit last week, targeting first 0.9870 and then the resistance area at 0.9910.

A slide below the 0.9750 zone (daily low and 20-Simple Moving Average in 4 hours chart) should weigh on the euro. Support levels are seen at 0.9730 followed by 0.9700 and 0.9670.

Technical levels