The greenback surged for a second straight day against major currencies amid eased trade war tensions with China, after declining for almost a month. Its rally is also a reflection of the well-performed GDP figure which has beaten estimates.
A slump in the equity market dragged down by technology stocks again has redirected capital to pour into the Forex market to some extent, pushing up the U.S. dollar, while Treasury 10-year yield held below 2.8 percent, the first time since early February to dip below 2.75 percent.
Due to significant gains in the DXY, the euro has suffered a lot ahead of some of the main data this week for the euro-zone, including Germany’s March CPI and conditions of labor market. The euro may see some rallies if they match estimates which are better than previous ones.
From the technical analysis on the daily chart of EUR/USD, two days of plummet has dragged the price down below the 20-day moving average and 61.8% Fibo retracement level and this breakout may lead to further drop towards March 20’s low of 1.22388, which is what our expected movement for the next few days.
For a broader outlook on the pair, it still continues to fluctuate in a box that is ranging from 1.25545 to 1.21538 and any breakout later will lead to subsequent movement in a single direction.
Chart 1: EURUSD Daily
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