- US dollar drops versus European currencies and the yen.
- EUR/USD rally finds resistance at 1.1035.
The EUR/USD pair rose further during the American session and printed a fresh daily high at 1.1035, the strongest since Monday. It remains around 1.1030, consolidating daily gains.
The US dollar is posting mix results. It is down versus its main European rivals and the yen while at the same time rising versus emerging and commodity currencies. Equity prices are falling across the globe on renewed concerns about the impact of the coronavirus, pushing riskier assets to the downside.
The DXY is having the worst day in three weeks, falling 0.20%. It is posting the first decline after rising during five consecutive days. On Wednesday it peaked at 98.19, the highest since early December and currently trades at 97.87.
US GDP data released today had no significant impact. The US economy expanded at a 2.1% annualized rate during the fourth quarter while jobless claims dropped. “Digging deeper into the details, one finds things that are not as rosy as suggested by the headline growth of 2.1% annualized. Much of the boost to Q4 real GDP came courtesy of sinking imports, the latter collapsing almost 9% annualized, the worst since the 2009 recession”, explained analysts at the National Bank of Canada.
Technical outlook
The intraday bias is bullish. The pair tested the 1.1035/40 area and a break higher should lead to more gains, targeting 1.1060. The critical support for the second half of the American session might be seen at 1.1015/20, a horizontal level and where the 20-hours moving average stands. Under the mentioned level, attention would turn to 1.1000 that protects January lows.
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