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"There's a significant divergence in the message coming out of the Fed and the message coming out of the ECB. That is a major supportive factor for the dollar against G-10, particularly against the euro and the yen."
- Standard Chartered (based on Bloomberg)
Pair's Outlook
The U.S. Dollar strengthened relative to its counterparts over the weekend. Now EUR/USD is only 100 pips away from one of its main targets at 1.31 (2013 Sep low), but the currency pair will have to breach the monthly S1 at 1.3150 first. Even though the weekly technical indicators are largely bearish right now, these supports may trigger an upward correction, which in turn is unlikely to extend beyond 1.33 (monthly S1 and 2013 Q4 low).
Traders' Sentiment
There is still no change in the sentiment of the market. Just as last week, 58% of open positions are long, and the rest are short. On the other hand, the share of buy orders soared, from 31% on Friday to 61% today.
© Dukascopy Bank SA