EUR/USD advances above 1.1300 on broad USD weakness
- EUR/USD gained traction during American session and pared early losses.
- US Dollar Index dropped below 97.00 on Monday.
- Wall Street rebounds sharply after opening deep in negative territory.
The EUR/USD pair fell to a daily low of 1.1227 during the European trading hours as the sour market mood made it difficult for the shared currency to find demand. With the greenback coming under renewed selling pressure in the second half of the day, however, the pair gained traction and was last seen gaining 0.55% on the day at 1.1315.
The data published by the Eurostat on Monday showed that the euro area's trade surplus in April narrowed to €1.2 billion from €25.5 billion in March but was largely ignored by the market participants. Meanwhile, the sharp drop witnessed in major European equity indexes weighed on the risk-sensitive EUR.
USD weakens as US stocks erase losses
The US Dollar Index (DXY), which spent the majority of the day in the positive territory above 97.00, turned south in the second half of the day and helped the pair start edging higher. As of writing, the DXY was down 0.4% at 96.70.
After starting the day deep in the negative territory, Wall Street's main indexes staged a decisive rebound to reflect improving market sentiment and caused the USD to lose interest. The S&P 500 opened nearly 2.5% lower on Monday and is now up 0.75% on the day at 3,065 points.
The only data from the US revealed that the Federal Reserve Bank of New York's Empire State Manufacturing Index rose to -0.2 from -48.5, providing an additional boost to market mood.
On Tuesday, the ZEW Economic Sentiment for the eurozone and Germany will be featured in the European economic docket. Later in the day, Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, will be testifying before US Congress.
Technical levels to watch for