EURUSD Falls on Stronger Dollar
We have been mentioning in many of our forecasts over the last few days that the dollar was expected to become the center of attraction in the coming days and that we could be in for a period of dollar rebound and that is what we have been seeing in the markets over the last few days. Yesterday, the price action was not driven by fundamentals but it was more of panic driving the markets as the stocks got sold across the board.
This led to a period of panic and usually, in such circumstances, the dollar tends to gain and thats what we saw yesterday. Also, with the market anticipating further rate hikes from the Fed in the coming months, it was added reason for the investors and the traders to buy dollars and that has led the pair to move lower towards the 1.24 region and as of this writing, the pair has broken through the support at 1.2380 and continues to look weak.
Looking ahead to the rest of the day, we do not have any major news from the US or the Eurozone for the day and hence it is expected that the pair would continue to move lower in the coming session as there does not seem to be an end to the panic selling as well. The dollar would also benefit from the strong data that we saw from the US last week and this should keep it well bid in the short term.