EURUSD: Dives despite weak US data and plummeting yields

Peter Bukov Axiory Global Ltd.

The EUR/USD pair was down half a percent on Friday afternoon and was trading below the 1.21 level during the US session, which are one-month lows for this pair.

Earlier in the day, US retail sales declined for the third straight month in December, sliding 0.7% month-on-month versus 0.0% expected. Online retail sales cratered 5.8% on a monthly basis.

Moreover, the University of Michigan sentiment survey disappointed as well as the gauge of current conditions fell 2.3 points to 87.7, while a measure of expectations dropped 0.8 points to 73.8.

More bad news came from the US pharmaceutical company Pfizer, which confirmed it would temporarily reduce deliveries to Europe of its COVID-19 vaccine. At the same time, it upgrades production capacity to 2 billion doses per year.

Traders rushed to safe havens amid the risk-off sentiment - the greenback strengthened, and so did the US Treasurys. The 10-yield was down more than 3%, approaching the 1% threshold from the upside.

The next key support for the eurodollar pair seems to be in the area of the previous highs between 1.1960 and 1.20.

Author

Peter Bukov

Axiory Global Ltd.

Peter Bukov is one of Axiory’s leading analysts. He has a master’s degree in Corporate Finance and is highly sought after as a teacher of Forex trading at various universities in Slovakia.

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