Soar in the sky like a bird!
That’s basically what most of the currencies are doing now to the US dollar. In fact the forex heatmap in our member dashboard is showing red across at the time of our publication. The euro is definitely not to be left out having touched 1.15 earlier.
So what is happening in this daily chart of the EUR/USD?
Well it is likely that the dovish comments by the US Federal Reserve has triggered the sentiments of investors. With the expectation of a pause to the interest rate hikes, demand for the US dollar probably went down south. We know that a currency with a high interest rate usually gets rewarded with demand so this shouldn’t come as a surprise.
In the shorter time frames, price action is often influenced by sentiments.
What lies ahead?
I wouldn’t go so far as to call this a reversal at the moment. As per our weekly review, the European Central Bank is not better off in terms of expectations as it recently acknowledged increased risks to the downside.
The US Non-Farm Payroll is due on Friday. As employment is a key indicator of economic health, it is important for us to monitor the development.