EUR/USD erases gains, unable to hold above 1.0700

The US dollar trimmed losses in the market after weak results of a US 10-year bond auction. EUR/USD pulled back below 1.0700 and found support above the 20-hour moving average, that stands at 1.0670. 

Holding far from lows 

The euro peaked during the American session at 1.0713, 75 pips above the weekly low it reached earlier. It was unable to hold above 1.0700 and then, following the mentioned bond auction dropped to 1.0677. The area around 1.0675 capped the decline and currently it trades at 1.0685, near the same level it closed yesterday. 

The rally from the lows was boosted by a decline of the greenback in the market. The euro particularly is not showing strength; today it is about to post the lowest daily close since July 2015 against the Swiss franc and it continued to decline versus the pound. 

EUR/USD technical levels 

According to Valeria Bednarik, Chief Analysts at FXStreet, the upward potential is looking limited, given that the 4-hour chart shows the 20-SMA crossing below the 100-SMA, both around 1.0720. “Whilst technical indicators have bounced from oversold readings, but lost upward strength within negative territory, indicating limited buying interest around the common currency.”

She warns that if the euro fails to holds around current levels, a break below 1.0640, could lead to a downward extension to the 1.0590 region during upcoming sessions.