EUR/USD falls back to 1.19, reversing early gains
|- EUR/USD erases the early US stimulus-fueled gains as Treasury yields remain elevated.
- The US-Eurozone growth divergence, oil rally could bode well for the greenback.
EUR/USD has retreated to 1.19, having printed a session high of 1.1932 in Asia. Elevated US Treasury yields helped the dollar erase early losses.
The pair opened the week on a positive note with the dollar nursing losses across the board in the wake of the US Senate's passage of President Joe Biden's $1.9 trillion fiscal stimulus plan. The bill now goes to House for clearance.
However, the US 10-year yield remained steady just shy of the 12-month high of 1.62%. As such, the dollar recovered losses, pushing EUR/USD lower.
The pair could drop further, as analysts expect yields to continue rising on stimulus progress. Besides, the greenback may find bids due to the oil rally. Reports of attacks on Saudi Arabian oil production facilities have powered Brent crude to the highest level since January 2020.
EUR/USD's downside will likely gather pace if the German Industrial Production and the Eurozone Sentix Investor Confidence disappoint expectations.
Bearish close
The pair closed below 1.1945 on Friday, marking a downside break of the 23.6% Fibonacci retracement of the rally from 1.0636 to 1.2349.
The bearish close happened as Friday's US jobs data bettered estimates, pointing to a relatively faster economic recovery than the Eurozone, which is facing delay in coronavirus vaccine rollouts and forced lockdowns.
Technical levels
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.