EUR/USD continued to come under pressure below the 1.1400 level in European trading on Tuesday. As the US dollar staged a significant recovery, the euro came under tremendous pressure against the dollars. This sea change made a notable dent in the euro’s performance against the dollar and other currencies in foreign exchange market.
After the news as traders tried to make sense of the impact of the latest economic indicators, EUR/USD exchange rate opened lower. The strength of the US dollar has recently driven the euro sharply down against its American counterpart. Market analysts commented that this trend was indicative of macroeconomic factors and overall investor confidence in both currencies.
During the trading day EUR/USD was hardly able to recover given the sell off and lost momentum. The duo stayed near critical levels of support. Investors face the most uncertain environment ever, and all their attention is on the next US jobs data. This picture will be an especially useful indicator of the health of the US labor market. Should it go ahead, it will affect the performance of the US dollar.
With economic indicators coming in mixed from both the Eurozone and the U.S. These developments have been increasing upward pressure on the EUR/USD exchange rate. The recovery of the US dollar has been attributed to various factors, including recent positive economic data and Federal Reserve policy expectations. It is forecast to worsen and any positive surprise in US employment numbers could increase the downward pressure on EUR/USD, analysts argue.
In EUR/USD volatile trading indicative of uncertainty EUR/USD has recently traded in an extremely volatile fashion which reflects indecisiveness amongst traders. The currency pair’s failure to breach the 1.1400 level shows that a bearish sentiment is currently dominating the market. Investor caution continues as they look for more guidance that will dictate their trading plans.
Beyond these factors, geopolitical events and economic policymaking in both regions further add to the currency pair’s volatility. e.g. smart traders are always watching market trends. One, they remain constantly on-watch for early signals that may presage changes in monetary or fiscal policy, or economic fundamentals across either region.