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EUR/USD Opens Europe Soft, UST Yields Remain Key Influence

EUR
MNI (London)
  • Rise in UST yields during European morning trade Friday boosted the USD which acted to press EUR/USD away from its late Thursday high of $1.1990 to $1.1910.
  • Initial recovery touched $1.1940 in early NY, dipped to $1.1911 before a stronger recovery allowed rate to edge to $1.1961 ahead of the close(close $1.1953).
  • EUR/USD recovery seen despite UST yields holding just off elevated levels.
  • Early Asia saw consolidation, the rate holding around $1.1950 before it jumped to $1.1967 as UST 10-yr yields dipped back toward 1.60%. However, yield quickly corrected back above 1.63%, which in turn saw pressure return to EUR/USD taking rate down to $1.1928 ahead of the European open.
  • Support remains at $1.1910/00, the 61.8% retrace of the recovery off $1.1836 to $1.1990 coming in close behind at $1.1895 ahead of $1.1872/69(76.4%/Mar10 low)
  • Resistance $1.1967/71(Int.Day high/76.4% $1.1990-10) ahead of $1.1990/1.2010. A break here to expose $1.2040/50.
  • Germany Wholesale Prices 0700GMT. Eurogroup meeting 1030GMT, Lagarde and Panetta attend but not due to speak.
  • US Empire State Mfg 1330GMT
  • UST yields, via USD strength, remains the key market driver. With this in mind FOMC Wednesday will be main focus, positioning ahead and react after.
  • MNI Techs: EURUSD stalled last week at 1.1990 and for now remains under pressure. Last week's gains however resulted in a break of 1.1952 resistance, Feb 05 low, suggesting scope for an extension higher near-term. A breach of 1.1990 would signal scope for a recovery and expose the 20-day EMA at 1.2018. From a broader trend perspective, a bear trend remains intact. An extension lower and a breach of 1.1836, Mar 9 low would resume this downtrend.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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