Good day forex traders.
Welcome to another weekly review of the popular currency pair.
In the previous review we noted a bullish push against the resistance of 1.18. The US dollar was experiencing weekness.
The next bullish target is likely 1.2. The US dollar is struggling to regain lost ground. An end to the bullish momentum will likely see a dip to 1.16.
BBC explores the current situation ”
The US dollar, long a symbol of American economic might, has fallen steadily this year.
The value of the dollar index, which tracks the dollar against six major global currencies, has fallen about 10% since January.
It pushed lower on Friday, even as demand for other safe-haven assets – typically a category that includes the US dollar – rose amid sabre-rattling between the US and North Korea.
The dollar, which surged in 2014 as the US economy gained strength, is hardly in danger territory. The index is running just a bit lower than it was a year ago.
But key US economic data was weaker last year. So what’s behind this year’s decline?
Things are looking up in Europe.
In some ways, this is a good news story, driven by a better economy in Europe.
The euro lost ground against the dollar in 2014, when central bankers adopted a stimulus program, while the US started to move away from stimulus policies.
Now, as the Eurozone economy improves and the European Central Bank eyes an end to the stimulus, the currencies are starting to move closer together. The election of pro-EU Emmanuel Macron in France in June contributed to confidence in the Euro.
The Euro’s gain is the dollar’s loss. A Euro is now worth more than $1.17, up more than 10 cents since the end of last year. ”
The uncertainty surrounding the political situation in the US is likely eroding investors’ confidence in the stability of the country. Any adverse development such as the North Korean crisis may further impact the US dollar.
Trade safely and always remember your proper money management.