Major currencies keep steadier in European morning trade

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EUR/USD little changed at 1.1900

The dollar was bid earlier in the day as risk assets were rattled by the plunge in the Turkish lira at the open this week. USD/TRY gapped higher by 15% at 8.35 but has since settled into a “calmer” but still volatile range around 7.80 to 8.00 in the past few hours.

European equities are still feeling some of the uneasiness, particularly banking stocks, but the mood is relatively calmer since the start of the day.

In FX, the dollar’s early gains have eased as we observe mostly little change across the board with the yen still leading the charge for the time being.

EUR/USD is sticking in a narrow 34 pips range and hanging around 1.1900 for now:

Sellers are still in near-term control as price keeps below the key hourly moving averages @ 1.1916-27. But the short-term focus may rest more towards key support levels as seen in the daily chart above.

The 200-day moving average (blue line) and trendline support @ 1.1857-60 is the key area that buyers need to keep above in preventing a further run to the downside.

The 8-9 March @ 1.1836-43 will add to that and a drop below those levels should trigger more stops as sellers will try to extend the downside momentum.

For today, just keep in mind that there are large expiries rolling off at 1.1840-50.

While the dollar was bid on risk aversion earlier, the bigger picture narrative also highlights a shift in sentiment in the greenback as leveraged funds switch to being long the dollar against major currencies – as seen in the CFTC report last week.

With the vaccine/recovery divergence also a factor to consider in pressuring the euro lower and dollar higher, not to mention rising Treasury yields, this could keep sellers interested to cap any rallies in the pair moving forward.
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This article was originally published by Forexlive.com. Read the original article here.