EUR/USD, USDOLLAR Reach Major Technical Levels
- EURUSD rallies to former support region near 1.1260/70.
- USDOLLAR falls back into consolidation support from February.
- See the April forex seasonality report.
At the start of this week, it was rather evident that the US Dollar was in trouble ahead of the releases of the Q1'15 US GDP report and the April FOMC meeting. The magnitude of the losses seen, however, we amplified by the overstretched positioning in a number of pairs, mainly EURUSD. Now, after an explosive rally the past week, EURUSD finds itself back at a major technical level: former support from the month-long consolidation in mid-Q1. Likewise, the USDOLLAR Index selloff has achieved significant downside objectives, leading us to wonder: now that we've seen behind that curtain and know how bad the bad data actually was, will markets become forward looking once more? If so, the greenback just needs a few positive data surprises to stabilize and begin to rebuild all that it has lost the past two weeks.
--- Written by Christopher Vecchio, Currency Strategist
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