EURUSD: Euro Aims To Correct Higher Vs. USD

At the time of writing, the euro was trading at 1.2080. Sterling and the euro have been showing multidirectional dynamics. The single currency entered positive territory due to a rebound in the EURGBP cross. The FX market could see subdued volumes until Tuesday due to a statutory holiday stateside.

It was good to see today’s move against the trend seen on Friday. All the prerequisite have been met, but there are fears that the key pair will continue to decline amid the political crisis in Italy as well as lockdown protests across Europe.

The EURUSD pair correlates well with the 10-year Italy-Germany bond yield differential. Its decline is putting pressure on the euro as Italy’s bond yield spread is widening. The spread is on the rise today, setting the stage for the euro to rebound. Virtually all crosses are on the side of euro buyers. If the bulls can bounce off 1.2065, then a leg up to 1.2120 could be in the cards.

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Disclaimer: Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial ...

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