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Christopher Lewis
EUR/USD

The Euro has continued to rally over the last couple of weeks, as we simply cannot pull back. Having said that, the US dollar is oversold by just about any metric you use, but clearly it looks as if we are not ready to give up on the idea of killing the US dollar right now. That being said, it looks as if people are focusing more on the hope trade when it comes to economies around the world reopening. Furthermore, the Federal Reserve looks as if it is going to do everything you can to kill the US dollar, and it looks like people are starting to take that seriously.

EUR/USD Video 03.06.20

Having said all of that, the reality is that the bond market has not really agreed. A lot of what we are seeing is the fact that many traders out there think that the United States will go to negative interest rates, and of course the massive stimulus that the US has put the work certainly does not help the situation either. Having said all of that, eventually the treasury market will drag the US dollar to higher valuations, but we are clearly nowhere near it right now. I see the 1.12 level above as a barrier, and quite frankly I would be surprised if we break above there easily. If we do, then it opens up the door to the 1.15 handle. To the downside, I would anticipate that the 1.10 level should be support.

For a look at all of today’s economic events, check out our economic calendar.

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