The inverse correlation between DXY (the USD Index) and EUR/USD is driving the major currency pair lower this morning.
We witnessed a selloff in US indices in late trade on Friday. This resulted in a reversal in DXY as traders looked to buy the safe-haven US Dollar. This upward momentum within the index has continued.
From a technical perspective, we could see more buying pressure in DXY with barriers not seen until 102.52 and 102.58.
EUR/USD Daily Chart: although we have seen a correction higher from Thursday's low of 1.0912, sellers have emerged once more this morning at bespoke resistance of 1.1015.
Our next support zone is located at 1.0805 - 1.0790. With this being close to the 78.6% pullback level of 1.0772, we look to this area (1.0805-1.0772) to be the main focus this week.
Conclusion: the DXY highlights scope for further buying. This suggests further losses in EUR/USD. The medium-term bias remains bearish, and we focus on 1.0805-1.0772. Thursday’s US Consumer Price Index data could be the catalyst for a change in sentiment.
We witnessed a selloff in US indices in late trade on Friday. This resulted in a reversal in DXY as traders looked to buy the safe-haven US Dollar. This upward momentum within the index has continued.
From a technical perspective, we could see more buying pressure in DXY with barriers not seen until 102.52 and 102.58.
EUR/USD Daily Chart: although we have seen a correction higher from Thursday's low of 1.0912, sellers have emerged once more this morning at bespoke resistance of 1.1015.
Our next support zone is located at 1.0805 - 1.0790. With this being close to the 78.6% pullback level of 1.0772, we look to this area (1.0805-1.0772) to be the main focus this week.
Conclusion: the DXY highlights scope for further buying. This suggests further losses in EUR/USD. The medium-term bias remains bearish, and we focus on 1.0805-1.0772. Thursday’s US Consumer Price Index data could be the catalyst for a change in sentiment.