- The euro bounces against the dollar and trims weekly losses against the pound.
- EUR/USD continues to hold above 1.1300 which has become key support.
- The dollar with mixed results on Friday, between deteriorating market mood and the next FOMC meeting.
The EUR/USD posted fresh highs for the day at 1.1345 and remains close to that level, trading in positive territory, having reached hours ago at 1.1300, the lowest level since January 10.
The dollar it gained momentum on Thursday as shares fell on Wall Street. Lower Treasury yields capped declines. The futures of the main indices point to a slight rebound in the Dow Jones, but lower for the Nasdaq.
The focus on Friday could continue to be on what happens to stocks and Treasuries. There will be no relevant economic data in the US, where attention is already on next week’s FOMC meeting.
In the Eurozone, the president of European Central Bank (BCE), Christine Lagarda, will give a speech and the preliminary reading of the business confidence index. On Thursday, Lagarde claimed that the ECB will not act as quickly as the Fed.
The current moment remains negative, after the return below 1.1370 and particularly after falling below the 20-day moving average at 1.1345. A firm return above this last level could relieve short-term negative pressures.
Holding above 1.1300 prevented further euro weakness for the time being. Should such support be breached, EUR/USD would be expected to extend the declines and possibly look to test the late December and early January lows around 1.1270.