Geopolitical tensions continue to rule the headlines yesterday as the clash between North Korea and the US continued for the second day yesterday. So far, it has been a war of words between Trump and North Korea with each side threatening the other and that has been enough to spook the markets and as a result of that, we are find the dollar a bit stronger while gold skyrockets and the stock markets tank. In the middle of all this, with the focus away from it, the euro continues its consolidation.
EURUSD Consolidates Away from Focus
The focus has clearly been on gold and the dollar as far as the currency markets are concerned but yesterday, the yen and the swiss franc also came under the spotlight, as they generally do whenever the global risks begin to rise. With the spotlight firmly away from it, the euro could afford to take a bit of rest as it consolidated and ranged through the course of the day.
Towards the beginning of the US session, the EURUSD pair threatened to break through the critical support region around 1.1720 by moving below 1.17 for a brief while but this was quickly met by a lot of buying which has since reversed the entire downmove and the pair now trades just below 1.1750 as of this writing. It is a clear battle between the bulls and the bears with the region around 1.1710 being the line in the sand for either side. If it breaks through cleanly and stays below it, then we are in for a deeper correction in the EURUSD pair.
Looking ahead to the rest of the day, we do not have any major data release from the Eurozone but we have the PPI data from the US later in the day which is likely to be watched closely to see if it continues the trend of improving data from the US. Expect some volatility in the EURUSD pair based on how the data pans out.
This article was originally posted on FX Empire