EUR/USD fails to hold on to recovery gains, plummets below 1.0800

• USD strength continues to dominate FX markets on Thursday.
• Manufacturing activity in Philadelphia area expands at a robust pace.
• Consumer Confidence in euro area improves in February. 

The EUR/USD pair advanced to a daily high of 1.0820 during the American session but erased its gains in a rapid fashion in the last hour as the greenback continues to capitalize on risk-off flows. As of writing, the pair was trading at 1.0790, erasing 0.12% on a daily basis.

After climbing to a fresh multi-year high of 99.91, the US Dollar Index has gone into a consolidation phase in the second half of the day and retreated to 99.70 area. However, the sharp drop witnessed in the major equity indexes in the US allowed the USD to gather strength and lifted the index to 99.90 area, once again.

Risk sentiment remains primary market driver

In the meantime, the data published by the Federal Reserve Bank of Philadelphia revealed that the manufacturing activity in the Philly region expanded at a strong pace in February to remind investors of the US economy's resilience.

On the other hand, the European Commission's preliminary data revealed that the Consumer Confidence Index in February improved to -6.6 from -8.1 to come in better than the market expectation of -8.2 but the positive impact of the upbeat data on the euro was limited.

On Friday, the IHS Markit will publish the advanced Manufacturing and Services PMI data for both the eurozone and the US. The Eurostat will release the CPI data for the euro area as well.

Technical levels to watch for