Euro Fights Back After Wednesday's Sudden Drop
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Euro Fights Back After Wednesday’s Sudden Drop

DailyFX.com -

Talking Points

  • EUR/USD slid sharply on Wednesday, but is looking more composed in Asia on Thursday
  • There was no obvious catalyst for its rebound, although a pullback in US yields may have helped
  • The data schedule is 'holiday light' for the rest of this week, though, and focused on the US

The Euro has recovered a little composure after Wednesday's precipitous fall, and EUR/USD looks comfortable for now above the 1.04 handle on Thursday in Asia.

Just as there was no clear specific reason for the single currency's swallow dive below that level, there seems no obvious catalyst for its rebound.

That weakness may have been down to a delayed "holiday" reaction to Monday's news that flailing Italian lender Monti Dei Paschi di Siena will need more rescue cash than previously thought. And Thursday's relative pep may be down to a slip in US Treasury yields following lacklustre pending-home sales and a well-bid Treasury auction, but the usual seasonal caution about thin markets probably applies in spades.

Even so EUR/USD is steady around the 1.0436 area, having fallen as far as 1.0383 at the nadir of its Wednesday slide.

The rest of this week brings more scheduled-event risk to the "Dollar" side of EUR/USD. Economic data for Thursday and Friday are focused on the US, with jobless claims and oil inventory probably most notable among the numbers due.

The British Pound shared much of the Euro's fate against the Dollar on Wednesday, but has seen a similar rebound in Asia. GBP/USD is back up to 1.22430, having been as low as 1.2200.

Bouncing back: EUR/USD

Euro Fights Back After Wednesday's Sudden Drop

Chart compiled using TradingView

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--- Written by David Cottle, DailyFX Research

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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