The US currency began the week on a positive and intends to continue the fight in the same vein. The greenback upward trend is helped by the stability of the American economy and the peppy mood in the market with respect to the EUR/USD pair. Many analysts are confident that the dollar will strengthen its position in the near future.
The current market sentiment towards the EUR/USD pair has fully turned towards the greenback, experts emphasize. Analyzing the situation with the European currency, they note that there were no attempts to raise the euro on Monday, November 25. According to experts, the reason for this was the loss of hope for a change in the ECB policy after the arrival of Christine Lagarde. Recall that in her speech, the new leader confirmed the position of Mario Draghi, making it clear that it is useless to wait for the strengthening of rates. As a result, the European currency was under strong pressure and could not rise, analysts say.
Unlike its counterpart in the EUR/USD pair, the dollar feels at the height, again showing the desire to move up. Support for the greenback is provided by strong macroeconomic data from the US, published at the end of last week. The current situation is setting the market for the Federal Reserve to take a long pause on the issue of cutting rates. The next rung of the ladder leading with the rise in USD was the active growth of the purchasing managers' indices for the manufacturing sector and the services sector (PMI), as well as the consumer sentiment index.
An important role in strengthening the greenback is given to the US economy, which skillfully resists negative external and internal factors, while maintaining amazing stability in the conditions of international trade conflicts. At the moment, the market is positive, as it is inspired by the fact of continuing negotiations between Washington and Beijing. This gives hope, albeit illusory, to the abolition of the December tariff increase, which will affect Chinese goods worth $156 billion. At the same time, stock markets are gradually gaining height, and volatility is declining. In this situation, investors are afraid of a surge in volatility, which may be caused by the fact of the conclusion of the deal, as well as another round of mutual increase in duties.
Current changes are favorably reflected in the dollar, which cannot be said about the stalled European currency. On the morning of Tuesday, November 26, the EUR/USD pair was almost at the same low level as the day before. Recall that yesterday the pair tested the 1.1012–1.1013 marks .
According to analysts, any negative news regarding the negotiations between the United States and China could contribute to a possible euro sagging in the EUR / USD pair. In the case of the implementation of this scenario, the pair will fall below the support of 1.1008. A breakthrough of this bar may cause a wave of sales of EUR / USD and the fall of the tandem to a minimum of 1.0989.
At the moment, the EUR/USD pair is trying to leave the low range, moving away from the level of 1.1014–1.1015. Analysts note the upward dynamics of the pair.
At the time, the EUR/USD pair reached 1.1016, but returned to its original position again. Market participants believe that such translational movements will be characteristic of the pair for a long time.
Most experts rely on the dollar, strengthening the already strong position of the US currency. Analysts do not record clear reasons for pulling down the greenback. On the contrary, much testifies to the benefit of its strengthening. The market is watching the dynamics of negotiations between the United States and China, on which the further movement of the classic pair will largely depend.
The material has been provided by InstaForex Company - www.instaforex.com