EUR/USD Daily Commentary

The US dollar has pared back some gains in the early day which is underpinning the EUR/USD exchange rate.

The FX markets are driven by the greenback in the week thus far and the EUR/USD pair has edged slightly higher in early trading on Wednesday on the back of a slightly weaker dollar.

The US Dollar index (DXY) ran into a hurdle near the 100.50 level yesterday and has given back a bulk of the gain since then.

The economic calendar has been relatively light in the first half of the week and fluctuations in the currency pair have been less volatile as a result. However, that stands to change.

Last week’s US retail sales report was the start of a series of reports that will show how the economy is handling the aftermath of the initial Coronavirus shock. Up until now, a lot of the data releases covered periods ahead of March when the virus did not have as great of an impact on the economy.

Thursday’s release of purchasing manager’s survey data stands to be the highlight for the week as it covers a more recent period. Further, survey data is expected from both the US and the eurozone. We may see some trends set as a result of the report, but ahead of it, a range continuation appears likely.

Support at 1.0830 has done well to hold EUR/USD higher in the early week and there is some potential for a further recovery in the session ahead to test resistance from the recent range.

This range resistance is found near 1.0900 which held the pair lower on Monday. At this point, a range break might not see follow-through unless there is some form of a catalyst behind the move. Tomorrow’s PMI data could offer such a catalyst. The US Dollar index has been edging lower since the end of European trading yesterday and last traded close to the 100.00 level. A drop below it could accompany a quick move to 1.0900 in EUR/USD.

Bottom Line

  • A weaker dollar in early trading on Wednesday is helping to lift EUR/USD higher after another test of 1.0830 support yesterday.

  • Thursday’s PMI data will be important and a more meaningful move in EUR/USD is likely to happen after the data.

Good Trading,


Dominik Stone

Disclaimer: Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Dominik Stone, it's employees, directors or fellow members. Futures, options, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures, spot forex, cfd's, options or other financial products. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

High Risk Warning: Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results.

© 2020 Copyright Dominik Stone International. All rights reserved.