EUR/USD breaks above 1.04, tests 5-DMA

The corrective move in the USD gathered pace in Asia, pushing the EUR/USD pair to a 5-DMA level of 1.0414.

The spot clocked a low of 1.0352 levels on Tuesday as the dollar remained solidly bid. The dollar index clocked a 14-year peak of 103.62.

The retreat in the US dollar seen in Asia is largely due to chart driven factors. Moreover, the trading volumes have dropped, thus doors remain open for erratic moves in the markets.

The data calendar is light across Europe. In the American session, US existing home sales could influence the pair.

Oversold on charts

Though the FXStreet Trend Index is bearish, the pair is now oversold as per the OB/OS Index. The daily and weekly RSI has hit the oversold territory a well.

EUR/USD Technical Levels

The spot was last seen trading around 5-DMA level of 1.0414. A break above 1.0430 (hourly 100-MA) would expose 1.0479 (hourly chart hurdle), above which gains could be extended to 1.05 (zero figure). On the other hand, a breakdown of support at 1.04 (zero figure) could yield a re-test of 1.0382 (hourly chart support) and 1.0352 (previous day’s low).