EUR/USD push higher now runs into a test of its key daily moving averages
The dollar continues to stay on the back foot today as the flows from dollar funding pressures continue to unwind on the week, following the Fed action on Monday.
In turn, this is keeping EUR/USD on track for its fifth daily gain with the pair moving firmly above 1.1000 in overnight trading and is now testing its key daily moving averages.
The key levels to watch out for in trading today for the pair are the 100-day MA (red line) @ 1.1047, the 50.0 retracement level @ 1.1065, and the 200-day MA (blue line) @ 1.1081.
A break back above both the key daily moving averages will see the bias in the pair turn more bullish again and that paves the way for a potential move back towards 1.1200.
The key thing to take note of though is that the relaxation in the risk mood this week could largely be due to month-end rebalancing. And even more so when you consider the current situation, after the heavy losses seen in the past two to three weeks.
Next week will provide us with more clarity about how the market is “feeling” amid the whole virus outbreak and the economic situation across the globe.
But for now, the dollar continues to trend weaker and the best we can do is use the technical levels to guide us as to where the greenback may be headed.