EUR/USD heads for the first gain after 5-day slide

• EUR/USD rebounds after hitting fresh monthly lows.
• Euro heads for first daily gain in a week against the US Dollar.

The EUR/USD pair consolidated above 1.1760 during the American session. Earlier today bottomed at 1.1715, the lowest level since November 21. The rebound was boosted by a correction of the greenback in the market.  The euro reached 1.1778 before retreating modestly.

The US Dollar Index was falling on Monday, ending a 5-day rally. It peaked today at 93.92 and the pulled back to 93.50. The slide took place amid a pullback in US yields. The 10-year dropped further from 3.13% to 3.06%.

A daily close for EUR/USD around current levels could signal some consolidation for the next sessions. Also, the DXY chart shows some exhaustion signals. Still, the short-term trend favors the US dollar. The FOMC minutes on Wednesday are the next key event for the greenback. Market participants will also continue to monitor trade negotiations between the US and China.

Technical outlook

“The 4 hours chart for the EUR/USD pair shows that it was unable to surpass a modestly bearish 20 SMA, holding a few pips below the indicator ahead of the Asian opening, while technical indicators have corrected oversold conditions, but hold below their midlines, suggesting that buyers remain sidelined”, said Valeria Bednarik, Chief Analyst at FXStreet.

Chances of further recoveries will increase on a break above the 1.1800 figure, but sellers will likely reappear on an approach to 1.1880 according to Bednarik.  “To the downside, a break below the daily low should anticipate an extension toward the 1.1660 level, a strong mid-term support.”