EUR/USD closes back in on the 1.1700 level
The dollar is down to session lows for the day now with EUR/USD nudging towards 1.1700 again as buyers try and breach the near-term resistance around 1.1680-85.
Elsewhere, the greenback is also down to lows against the likes of the franc, aussie and kiwi. AUD/USD is chasing fresh highs of 0.7120 on the session with NZD/USD looking towrads the 0.6600 handle as well.
For the case of EUR/USD, the 1.1700 level is a key mark to be mindful of as a break above that will reverse a lot of the good work by sellers in the last week.
What is making things interesting so far on the session is that the dollar is seen weakening further despite equities looking softer in the past few hours.
With month-end flows also set to come into consideration over the next few sessions, what is the next play for the dollar as we hit this crossroads?
Citi seems to suggest that month-end flows will keep the dollar bid this time around:
CitiFX Quant's preliminary estimates have also suggested that USD pressure should prevail. The sharp losses in equities in September leads the asset rebalancing model to suggest a rotation into equities from bonds with a moderately strong signal at +0.8/-0.7 historic standard deviation respectively. The FX impact of the signals is likely to be USD buying, with the signal significant by historic standards (over 2 standard deviations).
Considering the risk positioning and the US presidential debate, there are also other reasons for the dollar to at least hold its ground ahead of the month-end but we'll see.
