EUR/USD reverts the drop, clinches highs near 1.1340

After an ephemeral test of lows near 1.1240, EUR/USD has now regained traction and is currently toying with daily highs in the 1.1330/40 band.

EUR/USD stronger, USD disappoints

Spot has quickly reverted the post-Yellen drop to the 1.1240 area after remarks by Chief Janet Yellen failed to shed light on a potential rate hike at the September meeting, sparking a wave of selling pressure in the greenback.

Yellen also expects forward guidance and asset purchases to remain a critical tool, noting that ‘future policymakers may wish to explore the possibility of purchasing a broader range of assets’.

Away from Yellen and adding to USD-selling, US Consumer Confidence gauged by the Reuters/Michigan Index dropped below forecasts to 89.8 for the month of August.

EUR/USD levels to watch

The pair is now up 0.27% at 1.1313 and a breakout of 1.1357 (high Aug.23) would aim for 1.1434 (high Jun.24) and finally 1.1466 (high Apr.12). On the flip side, the immediate support is located at 1.1242 (low Aug.24) followed by 1.1223 (2014-2016 support line) and finally 1.1179 (38.2% Fibo of May-June drop).