The pair is down 0.2% to 1.1020 levels at the moment after touching a high of just above 1.1100 earlier in the day. The dollar is holding steadier in trading today and that’s helping with the mood somewhat. Still, we are seeing safety bids keep up with USD/CHF down 0.5% to 0.8545 at the moment. But at least the flows in major currencies are more consistent with the risk mood now. My two cents from yesterday:

“As for the euro, it’s quite an outsized move but it speaks to the level of disdain against the dollar at the moment I guess. At some point in the next few sessions though, you would think that traders will come around on this with regards to the euro. I mean the ECB won’t like a higher currency amid a hit to the global economy and a trade war with tariffs flying about. So, that’s something to consider.”

In a time where tariffs are threatening global growth and the European economy is also set to be hit, the euro isn’t quite a natural hedge for safety. That especially with the ECB also surely not liking a stronger currency amid tariffs and war on trade.

The first wave of the market reaction saw the dollar slammed hard. But now perhaps we’re starting to see markets readjust and liquidity start to slowly trickle back in.

That being said, it’s still early in the day as well. There is still the US jobs report to come along before Fed chair Powell’s speech later. And not forgetting more tariff headlines during US trading.

EUR/USD may be a little lower on the day but the near-term chart above still shows buyers well in control. A drop below 1.1000 will give sellers some incentive though before wrapping up the week at least from a technical perspective.

This article was written by Justin Low at www.forexlive.com.