The EURUSD had a choppy day of trading yesterday, one in which it ended higher for the day but in no way showing any kind of strength so far. With the lack of economic data, it was left to the news and fundamentals to drive the moves in the pair and we had an up and down day with various kinds of news floating here and there and this has kept the traders busy overall.
EURUSD Turns Choppy
The day began with the pair continuing near its lows in the 1.1920 and showing no signs of recovery. The dollar held steady during the first half of the day and the lack of economic events to drive the prices was telling. But as the day wore on, the interest and the action picked up slowly and this was driven by news and fundamental events. We had reports that said that China would curtail the purchase of debts from the US and this was a huge blow for the US and the dollar as a whole. China is one of the biggest purchasers of US debt and the reaction from the market to this news showed how much of the US market is being controlled by China.
The pair shot higher on this news and the EURUSD traded above the 1.20 region for a brief while and it looked as though it would continue to move higher. But selling set in at this point as those caught out on their longs took some profit and this pushed the pair low and it trades above the 1.1950 as of this writing but looks weak. There were also reports that the US could pull out of the NAFTA talks and though the US denied it, the market is yet to believe it fully and we are seeing the dollar on the backfoot as a result.
Looking ahead to the rest of the day, we have the PPI data from the US later in the day and that is likely to bring in some volatility. If the data comes out stronger, then we should see some more pressure on the pair in due course of time as the market waits to see if there is a break of the 1.19 region.
This article was originally posted on FX Empire
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