Fundamentals remain supportive
Fed's Powell dovish speech from yesterday failed to provide much support for the EURUSD pair, but fundamentals remain overall supportive for further gains. This morning, the final German GDP q/q beat expectations, but rising US yields are still a headwind for bulls. Later today at 15:00 London time, Powell continues his testimony which could lead to volatility in the pair, although most of the things have already been said yesterday.
Higher US yields pushing the pair lower
This chart shows how the pair followed the increase in US yields and the bearish German / US 2y yield differential this morning.
Sentiment is positive for the euro
Risk sentiment is definitely supporting the euro, with Europen indices opening higher today after a softer close in Asia. Currency strength so far also points to risk-on, with commodity currencies the top performers for the day (kiwi and loonie.)
Technicals are bullish
The pair has been in a strong uptrend recently but is moving sideways this week. I expect the 1.2100 level to hold and would trade the pair from the buy side.
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Fed's Powell dovish speech from yesterday failed to provide much support for the EURUSD pair, but fundamentals remain overall supportive for further gains. This morning, the final German GDP q/q beat expectations, but rising US yields are still a headwind for bulls. Later today at 15:00 London time, Powell continues his testimony which could lead to volatility in the pair, although most of the things have already been said yesterday.
Higher US yields pushing the pair lower
This chart shows how the pair followed the increase in US yields and the bearish German / US 2y yield differential this morning.
Sentiment is positive for the euro
Risk sentiment is definitely supporting the euro, with Europen indices opening higher today after a softer close in Asia. Currency strength so far also points to risk-on, with commodity currencies the top performers for the day (kiwi and loonie.)
Technicals are bullish
The pair has been in a strong uptrend recently but is moving sideways this week. I expect the 1.2100 level to hold and would trade the pair from the buy side.
Please hit the "LIKE" button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
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Update - Retracement reached all the way down to 78.6% - a surprisingly deep correction. However, keep in mind that markets are cautious about the German reopening plan, which put some selling pressure on the EUR.
