The US dollar advanced against the euro today at an average pace of about 5-10 pips per hour as US stocks extended losses, failing to get any benefit from the economic data on consumer spending and personal incomes.
Since the credit crisis started, MarketWatch reports, the US dollar has often gained support from weak stocks as investors shift out of riskier assets and into the US currency for its status as a relative safe haven. Falling risk appetite also tends to support the yen. This could explain the strength of both the US dollar and the yen today.
It looks like we are going to close the day in EUR/USD with a strong Bearish Engulfing pattern, which is a good development for my short position in this forex pair. This week is quite rich in economic data culminating, of course, with the NFP at 12:30pm GMT on Friday.
