EUR/USD recovers from weekly lows to the 1.1615 area

• Euro trims losses versus US dollar, recovers 1.1600.
• US dollar retreats across the board as US yields slide.

The EUR/USD bottomed earlier on Monday at 1.1589, reaching the lowest level in a week. After the beginning of the American session, it rebounded, and it is hovering around 1.1615, down for the day, but off lows.

The break under 1.1615 in EUR/USD ended days of a range trading between 1.1615 and 1.1670. The euro is back near the 1.1620 area; a recovery back above should alleviate the bearish pressure. The euro remains among the worst performers on Monday ahead of Thursday’s ECB meeting.

“The Eurozone focus is on the ECB meeting, but I don't think it's a big market driver, barring a jaw-dropping shift to a hawkish bias. What the euro needs, if it is to make a break higher, is better economic data. Supply-chain issues have hurt and if that doesn't change, then the euro will meander until the US rate outlook triggers the next leg down in EUR/USD and a further reversal of the move up we've seen since the Fed came to everyone's aid in March 2020”, said Kit Juckes, Chief Global FX Strategist at Société Générale.

The dollar lost momentum amid a decline in US yields. The 10-year dropped from 1.68% to 1.62% in a few minutes, and pushed the DXY away from the 94.00 area. Also, risk appetite weighed on the greenback. The S&P 500 index hit a record high and is up 0.28%; the Nasdaq gains 0.52%.

Economic data from the US surpassed expectations with the Dallas Fed Manufacturing Index rising to 14.6 in October above the 6.8 of market consensus. The key report will be Q3 growth numbers on Thursday.

Technical levels