EUR/USD Faces Dollar Bid as Equity Weakness Bites
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EUR/USD is contending with a resurgent dollar as weakness in equity markets drives haven flows into the greenback. This cross-asset dynamic is offsetting some of the bullish momentum generated by recent dovish FOMC minutes, creating a tug-of-war for direction.
The pair's technical structure remains constructive following its recent breakout, but sustained risk-off sentiment in stocks could keep a lid on further gains ahead of Wednesday's PCE data. Traders are watching whether dollar demand fades once the inflation report clarifies the Fed's path.
Should equities stabilize and PCE come in soft, EUR/USD could resume its upward trajectory as risk sentiment flips back in favor of higher-yielding currencies over the safe-haven dollar.