EUR/USD rebound from multi-year lows, back near session tops post-US PMI
- The USD retreats from multi-year tops amid a slump in the US bond yields.
- Awful US ISM manufacturing PMI adds to the intraday USD selling bias.
The EUR/USD pair recovered its early lost ground to near 28-month lows and has now moved to the top end of its daily trading range, around the 1.0975 region post-US ISM PMI.
The US Dollar failed to preserve its early gains to fresh multi-year tops and drifted into negative territory following the release of awful US ISM manufacturing PMI, which fell to a three-year low level of 49.1 in August.
A combination of negative factors weighed on the USD
Against the backdrop of a sharp intraday turnaround in the US Treasury bond yields, the data exerted some heavy pressure on the greenback and turned out to be one of the key factors behind the pair's goodish intraday bounce.
In fact, the US bond yields crashed to fresh multi-year lows and were further pressurized by the US President Donald Trump latest criticism about the Fed's policy stance, forcing investors to price in aggressive monetary easing.
It, however, remains to be seen if the pair is able to capitalize on the recovery move or meets with some fresh supply at higher levels amid firming expectations that the European Central Bank will opt to ease policy further in September.
Hence, it will be prudent to wait for a strong follow-through buying back above the key 1.10 psychological mark before confirming that the pair has formed a near-term bottom and positioning for any further appreciating move.
Technical levels to watch