EUR/USD surges above 1.0400 from multi-year lows as equities soar

The EUR/USD pair has rebounded from the lowest intraday level since 2017 and reversed direction upwards above 1.0400 late on Friday amid a prevalent improvement or risk sentiment and a correction of the US dollar. The euro is still headed toward the lowest weekly close since December 2002.

Recovery in equity prices weakened the US dollar that turned negative. The Dollar Index fell for the first time in seven trading days. Treasury yields stabilized not following the improvement in risk sentiment. The Dow Jones gains 1.56% and the Nasdaq 3.64%. EUR/USD trades near the daily high around 1.0410, after falling earlier to 1.0348.

Risk sentiment is the key market mover on Friday. Economic data from the US showed a larger-than-expected decline in Consumer Confidence to the lowest since 2011. Fed’s Kashkari mentioned that inflation is much too high and explained that a recovery in the supply chain could help the Fed.

Technically speaking; the EUR/USD is about to post the successive decile for six weeks. Technical readings in the wider scope do reflect a strong bearish momentum that would likely favor additional declines in the weeks to come. A corrective advance or at least another consolidative stage is potential and would help to enhance the dominant trend.