EUR/USD Drops Further and Ends Week Under Pressure
EUR/USD extended losses on Friday after Janet Yellen said that a rate hike is “appropriate in the coming months” boosting the demand for the US dollar. Greenback rose further across the board and is about to end the week on a strong note.
The pair bottomed at 1.1110 and it was trading at 1.1112/16, almost 80 pips below Thursday’s closing price and down a hundred from the level it had a seven days ago.
The euro fell for the fourth week in a row versus the US dollar and on Friday broke below previous lows hitting fresh 2-month lows. Price is about to end the week slightly above 1.1100 and for the first time since January below the 20-week moving average.
A negative outlook
Bearish signals continue to dominate the technical and fundamental outlook in the short-term. Regarding price levels, EUR/USD is about to challenge 1.1100 and below a more important support area is 1.1045/55 (uptrend line from November lows and a zone of various daily highs/lows).
On the fundamental side, today’s statement from Janet Yellen and last week FOMC minutes, reinforced monetary policy divergences between the European Central Bank and the Federal Reserve. In the US a rate hike in June or during the third quarter appears more likely every day. Next week, an upbeat jobs report could increase significantly expectations in favor of a rate hike.
