Greenback gathers pace on taper expectations

As the US dollar gained some strength from the growing expectations of a Fed taper next week, the euro pulled back towards the 1.37 level before catching a bounce.

With EUR/USD currently trading at 1.3732, the main resistance to upside is the 1.38 level. It was tested yesterday with the 1.3830 mentioned by my colleague David Madden.

This may mark something of a top for the currency pair for now, until we get more clarity on monetary policy decisions from the FOMC meeting. US ten-year bond yields are in an uptrend and, while it is still below last week’s spike of 2.91%, there is a degree of bullishness surrounding the greenback. This is partly due to the sell-off in equities over the past few days and investors’ need for a safe haven.

1.3620 is the next support should 1.37 fail, so it’s likely we’ll see a range-bound price action for the next week.

Eurozone employment change was as expected and registered no change on the quarter. US PPI later this afternoon is likely to show a small increase on last month. Wholesale prices are expected to rise 0.1% for November, against the decline of 0.2% seen previously.

Spot FX EUR/USD chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.