EUR/USD erases small portion of recovery gains, steadies around 1.2140

• EUR/USD looks to close modestly higher on Monday.
• US Dollar Index stays flat below 91.00 during American session.
• Wall Street's main indexes trade mixed at the start of the week.

The EUR/USD pair fell to a fresh five-day low of 1.2078 on Monday but didn't have a hard time reversing its direction in the second half of the day. After rebounding to 1.2167, however, the pair lost its bullish momentum and seems to have gone into a consolidation phase. As of writing, the pair was up 0.16% on a daily basis at 1.2140.

DXY turns flat on the day after early rebound

Earlier in the day, the broad-based USD strength caused EUR/USD to push lower. Heightened worries over the EU and the UK failing to reach a trade deal before the deadline forced investors to adopt a cautious stance and helped the greenback find demand. 

The US Dollar Index, which lost more than 1% last week, advanced to a daily high of 91.23. However, the sharp upsurge witnessed in the EUR/GBP pair showed that the shared currency also took advantage of the selling pressure surrounding the GBP.

In the second half of the day, the greenback struggled to preserve its strength amid the mixed performance of Wall Street's main indexes and the lack of significant fundamental drivers. At the moment, the DXY is virtually unchanged on the day at 90.71.

On Tuesday,  the Eurostat will publish the third-quarter Gross Domestic Product (GDP) data for the eurozone, which is expected to show that the eurozone economy has expanded by 12.6% on a quarterly basis. Additionally, the ZEW Economic Sentiment Index from Germany will be looked upon for fresh impetus as well.

Technical levels to watch for