Tuesday showed further losses in the EUR/USD currency pair. It continued to come under pressure, trading below the 1.1400 level through European trading hours. This marked decline is mostly due to a rebound in the US Dollar which has played a major role changing market dynamics. Traders and analysts are watching the pair with great interest. They’re keenly finding the record US jobs day to provide new insights that will shed light on the economic picture.
With the morning session struggling for EUR/USD to maintain its trade above the key psychological mark of 1.1400. Futures traders had been watching the crisis intently as it played out. The recent highs and lows of the pair are a perfect example that demonstrate the high volatility present in the foreign exchange market. Investors are extremely focused on the effects of divergent economic signals. Not so long ago, the momentum was all on the other side. This adjustment is due in large part to a strong rebound in the US Dollar, which has been rising against most currencies.
The US Dollar is rallying. This spike is largely driven by anticipation of future economic data releases—in particular, the jobs report. As the market is pricing in these reports, traders are positioning themselves for them and creating a self-fulfilling prophecy of increased pressure on the Euro. The economic situation in Europe, even beyond the borders of the Eurozone, is still very fragile with numerous challenges still posing risks to the Eurozone’s growth prospects.
FXStreet had a favourable outlook on the pair as the EUR/USD pair has been in focus as it tests crucial support levels. That’s because market participants are generally looking to the effect that US jobs data yet to be released will have on the pair’s trajectory. If the report is strong, it would likely strengthen the US Dollar even more. If results come in a bit lower than expected, it may offer temporary relief for the Euro.
Traders are encouraged to be cautious as they maneuver through these altered market landscapes. Given the sensitive balance between economic data and currency valuations, markets are all too vulnerable to fast changing expectations. Because of this, the EUR/USD is one of the hottest pairs sought by the forex trade.