EUR/USD remains a key pressure point as it holds a break above 1.10
The dollar is getting no reprieve on the session as it continues to fall across the board against the rest of the major currencies bloc today. EUR/USD has now pushed to a high of 1.1034 while cable is running into key near-term resistance near 1.2260.
Meanwhile, the likes of the aussie and kiwi are also pushing solid gains against the greenback with AUD/USD and NZD/USD hitting session highs of 0.6767 and 0.6334 respectively.
US-China trade talks remain the key focal point in markets right now and currency traders aren’t really siding with a massive breakdown in talks – as evident by yen flows as well.
I reckon the dollar flows we’re seeing this morning could be in part related to the significant strengthening in the yuan earlier on – after the Bloomberg report of a possible currency pact in the partial US-China trade deal.
Couple that with a near-term technical break in EUR/USD and you have a bit of a potential breakout in dollar pairs across the board.
Looking at the chart above, there isn’t really much stopping EUR/uSD from a potential run towards the swing region of 1.1050-55 and swing highs of around 1.1070-75.
However, fundamentally, any sustained run now will depend on trade talks in Washington so until we have more clarity on that, it’s hard to get too excited just yet about a major breakout towards the upside in the pair.