EUR/USD continues its series of higher lows, higher highs this week
The pair is maintaining a more bullish near-term bias and is now nearing the 1.0900 handle as well as a test of the 38.2 retracement level of the swing move lower this month.
Buyers found support just under the 1.0800 handle in the recent move, also holding on to a key downside trendline support around 1.0793 in trading last week.
But as the market turns more risk averse this week, EUR/USD has seen been more bid despite the dollar's status as a haven currency. So, what gives?
This is a bit of a tricky one to figure out but perhaps the outflows in US equities and falling Treasury yields have something to do with it and the market is seeing that as a reason to rotate their portfolios a little bit.
At the same time, there is also EUR/GBP month-end flows to contend with as the pair now looks to push beyond 0.8400 after recently testing key support at 0.8300.
And for trading today, there is also a host of large expiries that is drawing price action in around the 1.0890-00 level (more than €2.5 billion).
Then, there is also the fact that the pair did continuously track lower for the better portion over the last two months so perhaps we are seeing some mild retracement currently.
I'd be more convinced of a solid bounce if price can make its way back above 1.0900 and stay there but for now, I reckon the big picture play would still be to sell into rallies.
That said, I'd only be more willing to chase such a move nearer to 1.1000 and 1.1100 by leaning on the daily moving averages to limit risk.
