EUR/USD is about to end Friday with a decline of around 60 pips but still headed toward the biggest weekly gain in a year. During the last hours the pair remained steady hovering around 1.1130/50.
A weak USD
Seven days ago EUR/USD dropped more than a hundred pips but then on Monday it recovered strength and started to rise. It jumped on Wednesday on the back of a decline of the US dollar across the board. Projections that the Federal Reserve won’t be able to raise rates as previously expected hurt the USD.
The pair also rallied on Thursday and peaked on Friday, seconds after the release of the NFP report at 1.1247, the highest since October 22, but then bounced to the downside, finding support above 1.1100.
Too far?
EUR/USD is about to have the best weekly performance in a year. It climbed more than 300 pips since Monday. Analyst from Danske Bank explained that the move higher from the pair was in line with their view of a stronger euro, but they consider that it may have risen too far and rapidly, warning about a potential short-term retreated.
On a wider perspective and for the rest of the year, analysts from Danske see fundamental factors supporting EUR/USD: being undervalued, a large Eurozone current account surplus, a stronger business cycle outlook in Europe, stretched short EUR/USD positions, bigger terms of trade benefits from the low oil prices and falling commercial forex hedging of the euro.
(Market News Provided by FXstreet)
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