EUR/USD extends the recovery to 1.1170, USD deflates

The greenback is now losing the grip vs. its main competitors, allowing EUR/USD to prolong its rebound and retake the 1.1160/70 region.

EUR/USD gathers traction on oil recovery

After bottoming out in the vicinity of 1.1130 during the European morning, the pair has managed to pull itself together and sparked a bounce as the upside in the greenback started to lose momentum.

Adding to the current recovery, crude oil prices have reverted the initial drop and have now pushed the barrel of West Texas Intermediate to daily highs above the $42.00 mark, while the Brent crude is approaching the $45.00 barrier per barrel.

In the meantime, data releases in both Euroland and the US economy have passed largely unnoticed, leaving the price action to the mercy of the risk trends.

EUR/USD levels to watch

The pair is now losing 0.12% at 1.1161 and a break below 1.1083 (200-day sma) would target 1.1043 (low Aug.5) en route to 1.0950 (low Jul.25). On the flip side, the next up barrier is located at 1.1193 (high Aug.10) followed by 1.1236 (high Aug.2) and finally 1.1263 (50% Fibo of the May-June down move).