- US dollar corrects modestly, remains strong on the back of risk aversion and a rebound in US yields.
- EUR/USD bearish tone intact, with eyes on 1.1200 and 2019 lows.
The EUR/USD pair bottomed earlier today at 1.1212, the lowest level since March 8. During the US session bounced modestly to the upside, but the recovery was capped below 1.1240. As of writing, trades at 1.1230/35, down 10 pips for the day, on its way to the third decline in-a-row.
The recovery from the lows took place amid a modest correction of the DXY. After hitting at 97.30, the highest since March 11, pulled back to 97.15. Still, the Index is up for the day. The greenback continues to be supported by a risk-off environment seen particularly in emerging markets over the last two days. Also, a rebound in US yields from monthly lows is helping the dollar on Thursday.
Data released today showed a softer that-expected German flash CPI numbers that marginally weakened the euro. Regarding US data, the new Q4 GDP reading came in at 2.2% below the 2.6% of the previous estimate while pending home sales fell 1% in February, against expectations of another increase. Economic numbers continue to point to a deceleration in growth in the US.
Short-term outlook
Volatility eased over the last few hours in the currency market. The short-term trend in EUR/USD continues to point to the downside. The next target could be seen at 1.1200, and if it breaks lower, the 2019 low at 1.1174 would be on the radar. To the upside, a recovery above 1.1245/50 (20-hour moving average) could help the euro from a technical perspective.
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