The US Dollar enjoyed a bout of strength to begin the year as EUR/USD endured a pullback toward support. While the brief reversal in price was hard to deny, it can be argued there were few changes in the underlying fundamental landscape to drive such a move. To be sure, a decline in risk appetite and damaged sentiment likely played a role as investors piled into the safety of the Greenback, but with sentiment repaired USD could face renewed pressure.
Further still, the technical EUR/USD landscape looks encouraging. While recent weakness may have spooked some bulls, it might be viewed as mere consolidation before a continuation higher by others. To that end, the series of higher-highs and higher-lows dating back to March remains intact and EUR/USD trades above a plethora of longer-term moving averages. Much of the same can be seen on the daily chart. Trading narrowly beneath the 50-day moving average.