Is the EURUSD dropping due to the impact of Covid, because the euro weakened on Thursday after the European Central Bank said that there is more stimulus fighting the coronavirus impact, but did not lower interest rates with one currency falling to the day's low as investors rushed for dollars?
The euro bounced nicely off support yesterday, a lot of euros have been sold on theweek so the next couple of sessions will be fairly instructive. Kaplan was the first Fedgovernor to vocalise support for tapering on the week yesterday, but overall US yieldsseem fairly relaxed as we head into payrolls today. If that price action is repeated todaypost US data, think we will see more of the same in terms of currency movements, abias to own commodity/growth currencies and gentle support for the euro. A verystrong payrolls print will likely see some pressure in fixed income and potentially givethe dollar a lift (1.5m+ on the headline?) especially if the equity market doesn’t like theprospect of taper chat. I retain a small long bias in the euro whilst we stay above1.1980/1.2000 and a move through and close above 1.2110 I believe will increaseinterest in the euro up move once again.
Most of the major currency pairs were stonger against the US dollar in both Euro and US trade. The euro was raised from the downwards near US$1.2092 to US$1.2145 and was near US$1.2138 at the US close.
EURUSD: Critical Resistance ahead. Directly closing break 1.2211/43 will extend strength to 1.2275 at least, the measured objective of the breakout pattern. Below 1.2125 would be the early sign of a potential correction phase. No change for the medium term view of boarder range with potential upside risk, but near term should be cautious on the tough barrier and potential momentum divergence.
DXY did not post a classic bullish outside day after FOMC Minutes. However, there is a moderate buy signal generated by TendencyForex System target 90.58/94 initially. Let's see how the trend develop in coming sessions.
The Euro fell from highs near US$1.2245 to lows near US$1.2160 and was near US$1.2175 at the US close. EUR/USD extended losses south of Quasimodo resistance at 1.2169 on Wednesday, nudging the 1.1985 May 5th low in view, arranged just north of the 200-day simple moving average at 1.1950.
The Euro rose from lows near US$1.2103 to highs near US$1.2182 and was near US$1.2170 at the US close. Friday’s lower-than-expected US non-farm payrolls metric softened US yields and bruised the greenback, consequently elevating EUR/USD off weekly troughs.