EUR/USD trims gains and drops to 1.1230 as DXY rebounds

• Euro loses momentum as DXY turns positive for the day.
• Wall Street recovers further while dollar accelerates to the upside.

The EUR/USD pair pulled back more than fifty pips from the daily top. As of writing, it is hovering around 1.1230/35, modestly higher for the day, and far from the five-day high, it reached earlier at 1.1287.

A stronger US dollar across the board pushed EUR/USD back to the downside. The DXY erased losses and rose again to the 97.50 as equity prices in Wall Street rose further, recovering from Friday’s slide. The Dow Jones is up almost 2% and the Nasdaq 1.05%.

Economic data from the US came in above expectations. Pending Home Sales jumped 44.3% in May while the Dallas Fed Manufacturing Index climbed to -6.1, against a reading of -59 of market consensus.

Short-term technical outlook

The EUR/USD is moving with an intraday bearish bias. The immediate support is seen at 1.1230. A break lower would expose the daily low at 1.1215. On the upside, the critical level is seen around 1.1250, the 20-hour moving average. If the euro rises above, it would gain momentum. The next resistance stands at 1.1275.