- Euro up a hundred pips from yesterday’s low versus the US Dollar.
- EUR/USD about to post a second daily gain in a row, first time to do so in three weeks.
The EUR/USD pair rose modestly above previous highs and reached at 1.1032, the strongest level since Friday. At of writing trades at 1.1025, consolidating most of the day’s gains and a hundred pips above Tuesday’s low.
The key driver today continues to be a decline of the US Dollar across the board. DXY dropped further hitting a fresh daily low at 98.48. The index continues with its sharp reversal from the multi-year highs it reached yesterday at 99.38.
An improvement in risk sentiment contributed today to weaken the greenback. The decline started yesterday following a reading under 50 of the ISM Manufacturing index. US yields are modestly higher today offering no relief to the Dollar. Comments from Fed’s officials have no impact. Williams argued more data is needed before making a decision while Kaplan offered no bias on what to do next.
A bottom in place?
The sharp rebound from 1.0925 could point that a short-term bottom is in place, particularly if the pair holds around current levels. The Euro could start trading in a new range between 1.0960 and 1.1060.
On the upside, above 1.1035, the next strong barrier is seen at 1.1065: a close on top would point to further Euro strength. On the flip side, a slide below 1.0960 would add bearish pressure and look to a test of the YTD low at 1.0925.
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