has fallen way out of favor of late and we have been hearing that the latest price action has been attributed to longer-term accounts booking profit on long USD positions
, and model funds establishing fresh Euro longs.
Fundamentally, the cooling off of sovereign debt concerns in Europe has also played a large role in the Euro’s rebound, while a downbeat Fed, weaker empire state manufacturing, disappointing Philly Fed, and softer headline PPI have all take away from any appeal the USD might have. It appears that so long as there is little hope for interest rates to move higher in the US, and so long as data continues to show weakness, there is very little reason for market participants to want to be buying the buck, even despite very stretched technical studies.
Looking ahead, all is quiet on the data front in Europe, with the only key release coming in the form of Eurozone trade balance (-0.5B expected) due at 9:00GMT. It is still quite early in Friday trade, but US equity futures and commodities are tracking moderately higher.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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