EUR / USD falls to test weekly bottom below 1.2100, DXY at one-week highs

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  • The dollar continues to advance in a context of risk aversion.
  • EUR / USD loses 150 pips from Thursday’s high.

The EUR / USD is trading above 1.2100 after hitting lows since Monday at 1.2091, just above the weekly low. The pair remains under pressure in the face of a general rise in the dollar and a fall in the stock markets.

The climate of risk aversion, triggered in part by what is happening in the bond market with the rise in US bond yields, favored demand for the dollar as a safe haven. The DXY surpassed 90.60 and reached a week high, after being below 90.00 on Thursday, at a month and a half lows.

In several market crosses this strong reversal of the dollar is seen, which went from operating at minimums in months or years to maximums in several days in a matter of hours. The change is also on Wall Street, which is in the process of correcting itself from all-time highs. US data on consumer confidence and personal income and spending, among others, will be released; however the focus will remain on returns and stock indices.

From a technical point of view, EUR / USD suffered rejection from the zone above 1.2180 / 1.2200, which has a negative connotation for the European currency. Now the next support is at 1.2090 and below the next strong hurdle looms at 1.2055 / 60. In the opposite direction, a return above 1.2150 would ease the downward pressure.

Technical levels

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