The greenback remains on the defensive against major currencies on Friday, though the downside pressure has eased somehow after an aggressive sell-off yesterday. Due to a widespread USD weakness, EURUSD reached a 1.5-month high at 1.1485, where the 100-DMA lies. This area capped the upside potential on Thursday but the upside risks are still there. So the key 1.15 barrier could be challenged in the short-term.The euro received a relief as Italy reached a deal with the EU over its 2019 budget. The easing political risks in the European region coupled with dollar sell-off across the board played into the euro’s hands. In the short term, the pair could remain elevated and even try to erode the local resistance in the form of the mentioned 100-DMA, should the US GDP and personal consumption expenditures data disappoint.
Meanwhile, in the longer term, the single currency could lose its appeal. The problem is that market participants downplay the general political and economic risks in Europe. At the same time, investor concerns over the imminent recession in the US look exacerbated. As such, markets may start to reassess the situation in 2019, which could help the greenback to stay within the bullish trend.