The dollar has held up, though has tracked moderately lower into the London open after earlier carving out fresh highs against a range of currencies. The EURUSD’s log a one-month low at 1.0570 amid a broader bid in the dollar. Price action, including the three-week closing lows seen late last week, has been showing that momentum is tipping southward. This follows ECB policymakers’ push back of market speculation for the central bank to shift out of dovish guidance. The dollar, meanwhile, rebounded from selling seen after Friday’s much weaker than expected U.S. jobs report.
EURUSD down trend had begun from the beginning of the month. The pair presents a bearish movement, moving below the 50 Day EMA, moving currently at 1.0579. The 4-hour chart indicates that the pair’s weakness will continue, with a RSI at 39 sloping towards oversold territory, while parabolic SAR remain negative since U.S. ADP data released last Wednesday. Hence EURUSD likely to hit this week 1.0550-1.0500 area, which is the confluence of the 61.8 Fibonacci level. Support is at 1.0400.
However, Geopolitical tensions will have investors on edge this week. Asia from the North Korean issue, Russia and Iran have threatened to counter any further U.S. strikes in Syria, and markets will be keen to figure out what the Trump administration’s strategy and goals are in the Mideast.
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