EUR/USD below 1.2300 handle, remains under pressure

The EUR/USD is trading at around 1.2275 down 0.58% on Friday’s trading as the European forex session is slowly coming to an end. 

The spot just saw profit taking in the 1.2250 region with a 30-pip rebound but the momentum remains tilted to the downside. 

One side finally capitulated in what was a tug of war in the last 3 days where the single currency traded in a tight range between the 1.2350 and 1.2400 level. It was a crowded trade to the upside and the bears finally took the lead and broke through the 1.2350 support in Friday’s European session. 

The euro negative sentiment is exacerbated by recent disappointing data on Wednesday with lower inflation in the Eurozone and speculation of a dovish ECB next week.

Meanwhile, the greenback is on a tear, the US Dollar Index (DXY) spiked almost 0.60% on Friday,  jumping from the 89.90 level to 90.40, smashing through the 90.00 mark with strong momentum.

Underpinning the greenback strength are bond yields which continue their advance for the third consecutive day and are reaching multi-week highs. The US 10-year Treasury yield is spiking above March 21 high and currently at 2.94%. 

Meanwhile, safe-haven gold is down in the 1,3350 region while US stocks are also taking a breather from their recent advance and are currently down on the day as investors are buying the greenback.

EUR/USD 4-hour chart

The current momentum is bearish. Resistance is seen at 1.2300 swing low and 1.2400 swing high while support is seen at 1.2260 demand level, followed by 1.2215 cyclical low.