Dollar still in a tough spot in European morning trade

No reprieve for the dollar so far this week

The greenback continues to keep in a more vulnerable spot, with EUR/USD climbing to near three-week highs just above 1.2150. Elsewhere, GBP/USD continues to chase towards 1.4000 while AUD/USD is up to test the highs for the year around 0.7805 earlier.
EUR/USD D1 16-02

Despite higher yields, the dollar is failing to find much relief as the market doubles down on the reflation narrative since the end of last week.

The fact that equities aren’t really shaken also adds to that sentiment as the risk mood continues to reflect more exuberance and euphoria in trading this week.

Going back to EUR/USD, price is now running into the 50.0 retracement level @ 1.2150 once again. If buyers can manage to hold a firm break above that, the late January highs and the 61.8 retracement level around 1.2190-97 will be the next key spot to watch.

The pair is now trading back to flat levels at 105.38 after having hit a high of 105.63 earlier and is keeping below its 200-day moving average @ 105.51.

If the dollar is unable to gather any momentum there as well, that’s not a good sign for other dollar pairs whereby we are seeing some key levels being lined up.

– GBP/USD taking aim at 1.4000

– USD/CAD holding just above the year’s lows near 1.2600

– AUD/USD closing in on the year’s highs around 0.7800-20

– NZD/USD at five-week highs looking towards 0.7300 again

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By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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