- Sharp decline in UoM Consumer Sentiment triggers USD sell-off.
- EUR/USD testing 1.1800, heads for weekly gains.
- US dollar about to end week under pressure, US yields fall sharply.
The EUR/USD rose further and printed a fresh weekly high at 1.1800. The pair is hovering around the highs, with the bullish tone in place, as the US dollar remains under pressure across the board.
The greenback was falling on Friday, and after the University of Michigan Consumer Sentiment report, it accelerated to the downside. The index tumbled unexpectedly to 70.2, the lowest level since 2011. US bond yields tumbled, and the DXY dropped toward 92.50.
The EUR/USD is rising 70 pips on Friday, the best performance in months. The euro is also higher versus the pound, but it pulled back against the Swiss franc.
Technical outlook
Technical readings in the daily chart show that sellers retain control, according to Valeria Bednarik, Chief Analyst at FXStreet. “A bearish 20 SMA provides dynamic resistance at around 1.1800 while developing well below the longer ones, which lack directional strength. Meanwhile, the Momentum indicator stands pat below its midline, while the RSI recovers from oversold readings, currently around 45.”
Bednarik warns that a break below the 1.1700 level should trigger a downward extension toward the 1.1600/40 area, “while further declines should expose the 1.1520 level.” On the upside, she mentions that above 1.1800, the next resistance levels come at 1.1840 and 1.1920, with approaches to the latter probably attracting selling interest.
