EUR/USD back near daily lows as euro recovery fades

• US dollar posts mixed results, Wall Street extends gains.
• Euro trims losses versus Swiss franc but remains under pressure versus USD, GBP.

The intraday recovery of the EUR/USD pair was short-lived and it is back near daily lows. The move to the upside found resistance below 1.0890 and as of writing, it is hovering around 1.0840/50, 55 pips below Monday’s close.

The bounce from the lows took place amid a correction of the greenback. But over the last hour, the US dollar recovered momentum as equity prices in Wall Street extend gains. Economic data from the US showed a record low reading for the ISM Non-Manufacturing Index in April but above expectations.

The euro came under pressure earlier on Tuesday, following the German Constitutional Court's ruling on the European Central Bank purchase programme (PSPP). EUR/USD dropped to 1.0824, the lowest in almost a week while EUR/GBP tumbled to 0.8400.

Technical outlook

The recovery of the euro versus the US dollar was capped by the 20-hours simple moving average that stands at 1.0880/85. A recovery above should open the door to more gains and to 1.0900. The next resistance is seen around daily highs at 1.0920/25.

On the flip side, EUR/USD trades near the daily low, with a bearish bias but steady at the moment. A consolidation under 1.0830 would add more pressure, exposing 1.0810; below the next support is 1.0780/85.