US dollar weakens further during US session, post modest losses.

EUR/USD breaks above 1.1405 and rises further.

The EUR/USD pair broke to the upside during the American session and reached a fresh daily high at 1.1423. Near the end of the session was consolidating gains, near the top and 70 pips above the low, ahead of the US mid-term elections.

The recent move higher took place amid a slide of the US dollar across the board. The DXY dropped to 96.26 and it was about to post the lowest close since October 23 as US yields pulled back.

US elections on Tuesday could influence on the US dollar depending on the results that are likely to start coming out during Wednesday’s Asian session. Also on Wednesday, the FOMC will start its 2-day meeting. No change in rates is expected and the impact on markets could be minor considering that there won’t be a press conference.

EUR/USD Levels to watch

The euro managed to rebound and recover from Friday’s slide. The momentum points modestly to the upside but in order to signal further strength ahead, EUR/USD needs to break and consolidate above 1.1450. Last week the pair found support above the 1.1300 area that continues to be the key level to watch.

In the short-term, to the upside, resistance levels might be seen at 1.1420/25 (Nov 5 high), followed by 1.1455 (last week high) and 1.1490. On the flip side, support could be located at 1.1405 (previous high), 1.1370 (Nov 2 low) and 1.1335 (Oct 26 low).