• US dollar trims losses across the board, DXY back under 96.00.
• Wall Street indices sharply lower, but off lows.
• EUR/USD recovers and rises back to the recent range.

The EUR/USD dropped to 1.1289, reaching the lowest level since January 10 and then rebounded. It is back above 1.1320, still in negative territory but off lows and back above the critical 1.1300 area.

If the pair manages to remain above 1.1300 it would remain in the current range with resistance at 1.1350 (horizontal level and the 20-day moving average). A daily close clearly under 1.1300 should increase the bearish pressure, targeting 1.1270.

The rebound took place as US stocks move off lows and the DXY backed away from weekly highs. The Index peaked at 96.12 and is back under 96.00. Still, caution and risk aversion dominates financial markets, but over the last hours there have been some improvements. Metals and even crypocurrencies trimmed losses.

The euro has been among the top performers of the last hours. It erased losses versus the Swiss franc with EUR/CHF rising from 1.0295 to 1.0350 and it printed fresh weekly highs against the pound as EUR/GBP cling to 0.8400.

Ahead of the key event of the week, the FOMC meeting, US data released on Wednesday came in below expectations with the Service and Manufacturing Markit PMI at 50.9 and 55 respectably, below the 55 and 56.7 of market consensus.

Technical levels