The EUR/USD currency cross followed suit, plunging more than 1% on Friday to trade below the 1.1200 level. This move downward happened throughout European trading hours and was caused in part by a second wave of new selling pressure. Market participants were nimble in addressing a new COVID-19 economic environment. They turned a careful eye towards incoming US data and rhetoric from Fed speakers.
The fall of the EUR/USD cross reflects the recent mood in the markets. Investors are looking ahead to some important economic figures out of the U.S. In normal times, this kind of data release would move currency valuations dramatically. The upcoming data holds some key metrics that may determine the Federal Reserve’s stance on the national monetary policy, making market eyes even more watchful.
The downward trend also corresponds with the rise of exchanges for trading credits. Traders are scrambling to reassess where they think things will shake out and how likely different scenarios are. A cocktail of new supply hitting the street and the threat of major economic releases have conspired to produce a nervous tone among buyers.
Market analysts are eyeing a large movement under the 1.1200 barrier. If realized, this move would mark the first long euro short dollar change of momentum. Stocks traders are preparing for hints from the Federal Reserve later today. They should be prepared to respond to any future changes in monetary policy or economic forecasts. These types of developments upgrade the potential for very heightened volatility in currency markets.