Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Euro goes up
On Thursday, the common currency rebounded from 2-1/2 month minimum because currencies heavily affected by recent US dollar buying jumped, with the strengthening mood for risk-taking this month.
Market experts told a flood of end-of-month US dollar purchasing on Wednesday had stopped with the beginning of November.
Along with expectations that China would increase its fiscal stimulus, it spurred the common currency and provoked substantial moves up in the Australian as well as New Zealand dollars, not to mention the Swedish and Norwegian crowns as well as a clutch of emerging market currencies.
A more than 1% rally in the UK pound on expectation for an EU-UK Brexit pact for financial services also contributed to the greenback’s woes, thus leaving it on track for its greatest one-day tumble for three weeks.
The common currency managed to rally to $1.1389, drifting away from a recent minimum of $1.1302, which had followed dismal euro zone data as well as fears as for the Italian budget.
Estimating the evergreen buck’s purchasing power against a pack of its primary peers the USD index went down by 0.5% hitting 96.642, drifting away from a 16-month maximum of 97.2 recorded on Wednesday.
As for the Australian dollar, it gained 1% ending up with $0.7146, backed by data disclosing a firm soar in Australia’s trade surplus.
Aside from that, the New Zealand dollar surged by up to 1.4%, while the Norwegian and Swedish crowns ascended too.
The Japanese yen soared a bit hitting 112.90. Eventually, on Wednesday, the Japanese currency slumped to a three-week minimum of 113.38 after the Bank of Japan uncovered its intention to maintain its extremely loose monetary policy for some time.
The offshore Chinese Yuan that had dived to a 22-month minimum this week, regained about 0.5% ending up with 6.9456.
The EUR made a significant rise on the news of the stimulus expansion. Will it last long?
April seasonal patterns weren’t supposed to work, but somehow they did. Even a strong fundamental issue such as the global recession amid the coronavirus couldn’t overwhelm it. That’s why May seasonal patterns may work as well.
The market sentiment is mixed as investors weigh US stimulus package against the rising infections and worse-than-expected US unemployment claims. Jump in for fresh analysis of EUR/USD, USD/JPY, S&P 500 and gold!
US Initial jobless claims will be announced on Thursday at 15:30 MT time.
The US dollar has broken through the key resistance, it failed to cross since March so far. Riskier assets are dipping. Let’s discuss it in detail.