The dollar is holding up decently so far in European trading
The greenback was mildly softer early on but is now keeping steadier as we navigate through some light push and pull in European morning trade today.
Of note, EUR/USD is moving to session lows of 1.1891 and that puts some focus on the week’s lows close to 1.1883-86 ahead of North American trading later.
Euro sentiment on its own isn’t looking too bright now that the post-Fed focus is starting to wear off and the market has some capacity to look outside of the US.
Europe’s summer reopening timeline looks in jeopardy while Germany is warning that easing of restrictions may have to wait longer as the virus situation worsens.
Add that to the vaccine divergence and yields divergence somewhat now, and that creates a bit of a chasm for EUR/USD to keep lower as long as those narratives play out.
The highs for the pair this week came post-Fed but failed to breach the 38.2 retracement level @ 1.1991 – similar to last week.
Sellers are back in near-term control now upon a break back below the key hourly moving averages @ 1.1925-27 and a breach below the week’s lows highlighted above will put the focus on the 200-day moving average next @ 1.1854.
Adding to that will be key trendline support @ 1.1857 as well as the 9 March low @ 1.1836, so those will be key downside levels to watch in case sellers start to chase further momentum as we look towards next week.