- The US dollar is surging across the board amid higher yields and a reversal in stocks.
- EUR / USD is set to post the lowest weekly close since mid-April.
EUR / USD fell further and hit 1.2099, the lowest level since May 14th. So far it has held above 1.2100 but remains under pressure as the US Dollar extends gains across the board.
The DXY jumped to 90.50 after trading below 90.00 hours. At the same time, the 10-year rate rebounded from monthly lows to 1.46%. On Wall Street, the Dow Jones fell 0.11% and the Nasdaq was flat.
Economic data released Friday showed an increase above expectations from the University of Michigan Consumer Sentiment Index to 86.4 in June from 82.9. Market players appear to be positioning themselves ahead of the weekend and the Fed meeting next week.
From a technical standpoint, the area around 1.2100 is key EUR / USD support. A consolidation below would leave the euro vulnerable to further losses. The next support is at 1.2060 followed by 1.2040. If he manages to defend the 1.2100 area, he could rebound. Now 1.2150 is immediate strong resistance followed by 1.2175.
Short term technical indicators favor the downside while the lowest close since April in the weekly chart also suggests that an extension of the bearish correction is on the horizon, particularly if it falls below 1.2100.