EUR/USD completes total U-turn – extends drops

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Yesterday, EUR/USD finally made a break above 1.20 and made it big-time. The pair even broke above the “whatever it takes” level of 1.2040 and hit a new high of 1.2070. However, this didn’t last.

In the US session, the dollar gained some ground, also thanks to a high level of consumer confidence. The greenback gradually reasserted itself and EUR/USD climbed down from the highs, eventually slipping under 1.20.

This climb down accelerates with a further drop: the pair is trading around 1.1950. Support awaits at 1.1870.

Some of this drop is related to fear that a strong euro would push Draghi to announce a softer version of QE tapering. Yet some is just a US dollar correction ahead of key US figures.

Later today, we will get a snapshot of the US economy via an updated version of GDP. This will be accompanied by the ADP Non-Farm Payrolls. The biggest event of the week is the official NFP on Friday.

Preview: Why this NFP could be very volatile – 5 reasons

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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