- The euro resumes its downtrend to hit new yearly lows at 1.1560.
- The worsening market sentiment is favoring the US dollar against its main rivals.
- EUR / USD: Below 1.1600, the next target is 1.1500 – TDS Securities.
The euro it has resumed its downtrend against the US dollar in the US trading session on Thursday, to hit fresh 14-month lows below 1.1580. The safe haven dollar appears to be strengthening across the board as market sentiment deteriorates.
USD Bounces With Equity Markets Turning Negative
The common currency is back on the defensive, after a weak recovery attempt seen during the European session. The US dollar has rebounded after major US equity markets fell into negative territory after slightly positive open. The Dow Jones Index is down 1.27% with the Nasdaq Index down 0.27% and the S&P 500 down 0.87% at the time of writing.
The US dollar index has recovered from the intraday lows of 94.12 seen during the early days of the US trading session, to regain lost ground and return to the 94.40 area, approaching the year’s highs to the date at 94.50.
The safe-haven dollar has been fueled by growing risk-off sentiment, to resume the overall positive trend. The dollar has rebounded steadily over the past week, driven by the rally in US Treasuries on expectations that the Federal Reserve will begin to reduce bond purchases in the coming months.
EUR / USD to drop to 1.1500 – TDS Securities
The recent break of the 1.1600 support has increased the negative momentum for the euro, according to the analyst team at TDS Securities, and has pinned the pair targeting 1.1500: “Given the prospects for real yield, we believe the 1.16 break it will be meaningful for momentum players. The next support comes at 1.15 “.