- US dollar gains momentum after correction in US stocks ends.
- EUR/USD down for the second day in a row, about to end the three-week streak.
The EUR/USD pair lost more than 60 pips in a few minutes, after moving in a small range for hours. It broke to the downside amid a decline in equity prices in Wall Street that erased in a few minutes all the ground gained in hours.
The Dow Jones is still up for the day, but just 0.55%, 600 points below the high. Crude oil also turned to the downside. As the reversal in equity markets took place, the greenback trimmed losses versus commodity and emerging market currencies and hit fresh highs versus main European currencies.
The US Dollar Index (DXY) jumped to 97.15, reaching the strongest level in a week. The greenback and the yen are the biggest gainers of the last hour.
The decline of EUR/USD and in US stocks reflects so far the recent recovery was a correction and they remain vulnerable in the short-short. The VIX also jumped to fresh multi-week highs.
EUR/USD down for the week
The pair is falling for the second day in a row as it continues to retreat from 1.1423, the three-month high it reached on Wednesday.
The consolation below 1.1280 leaves the pair vulnerable to more losses. The immediate support might be seen around 1.1220, followed by 1.1180.
The EUR/USD is about to post the first weekly decline after rising during the previous three when it climbed from 1.0800 to 1.1400. For the second time this year, the pair has been rejected from above 1.1300.
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