EUR/USD slides below 1.1300 as US Dollar gains momentum
|- US dollar rises across the board pushing EUR/USD to the downside.
- Pair hits 5-day lows, suffers so far worst decline since late April.
The US Dollar strengthened across the board and reached fresh high versus European currencies, including the Euro, reversing from earlier losses. The rally took place after the greenback broke key technical levels and following usual comments from US President Trump that included threats to impose aggressive tariffs to China and Mexico. He added his considering sanctions to block the Nord Stream 2 and said Germany is putting itself at risk by depending on Russian energy.
After a brief spike to 1.1340 following the release of US Inflation data, EUR/USD dropped back to the range 1.1305 - 1.1325 that contained price action for several hours until recently when it broke to the downside. It fell under 1.1300 and bottomed at 1.1288, the lowest level since Friday.
“Today's report, while a touch softer on core CPI, left the USD littler bothered. Though the broad USD has demonstrated a firming correlation to our data surprise indices across the G9, we rather think that today's softer core is already in the price given curve pricing. With the Fed in blackout mode, we expect range trading to persist. In line with this, 1.1265/80 pivot and 1.1365 (200 day moving averge) in EUR/USD are key. We see little appetite to test a break of these barriers at least until the Fed decision passes”, commented TDS analysts.
The pair remains near daily lows with the bearish momentum increasing as the US Dollar holds to gains. The DXY rose above 96.80 and climbed to 97.00, also reaching the strongest since Friday. Equity prices in Wall Street post modest losses and crude oil tumbles 2.75%.
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