EUR/USD jumped to a high of 1.1846 on Monday on the back of a broad based USD sell-off even though the 10-year US Treasury yield rose to 2.30% and the US-German 10-yr yield spread improved to 1.76 from the previous day’s print of 1.74.
Eyes Monthly 50-MA
The downward sloping monthly 50-MA is stationed at 1.1870. The monthly 50-MA was last seen in action in August 2014, when it offered support around 1.3390 levels.
Strong EZ GDP to boost EUR’s appeal as growth currency
As discussed here, the EUR has been treated as a growth/risk-on currency this year. The preliminary Q2 GDP report due today at 9:00 GMT is expected to show the Eurozone economy expanded 0.6% q/q and 2.1% in annualised terms. A better-than-expected GDP figure would boost the EUR’s appeal as growth currency and push EUR/USD above the monthly 50-MA level of 1.1870. Further gains depend on the quality of the US personal spending and income report due at 18:00 GMT.
Risk reversal remains flat lined
Yesterday’s rally in the spot was accompanied by a minor uptick in the 25-delta risk reversal from 0.25 to 0.30. However, on a larger scheme of things, risk reversal remains flat lined, which indicates the rally in the EUR could be overdone.
EUR/USD Technical Levels
The spot was last seen trading around 1.1825. At least two consecutive daily closes above 1.1870 [monthly 50-MA] would open doors for a sustained rally to 1.20 and 1.2042 [July 2012 low]. On the downside, support is seen at 1.1765 [5-DMA] and 1.1692 [10-DMA]. Both the averages are sloping upwards hence dips could be short lived. Under 10-DMA, a major support is seen at 1.1613 [July 26 low].
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.