EUR/USD jumps to 1.1715 as German 10-yr yields hit 7-week tops
|- US dollar weakness, rising German 10-year bond yields lift EUR/USD.
- Will it sustain the upside ahead of the US housing data, Draghi’s speech?
The EUR/USD pair extends its bullish momentum into a third day, as the bulls regain poise amid broad-based US dollar weakness and rising German 10-year government bond yields.
EUR/USD eyes Draghi’s speech for fresh direction
The common currency hit fresh session tops at 1.1715 versus its American rival after the German 10-year bond yield clocked fresh seven-week tops above 0.50% level, up 2.70% on the day. The German yields rallied hard in anticipation of a three billion Euro sale of long-dated German debt due later in the day.
The spot also found support from the renewed weakness in the US dollar across its main peers, as worries over the US-China trade war subsided. The US dollar index drops -0.32% to seven-week lows of 94.32.
However, further upside could be capped amid a rise in the US Treasury yields across the curve amid expectations of Fed’s faster pace of monetary policy tightening, as the US economy remains on a solid footing.
In the day ahead, the pair looks forward to the US housing starts and building permits data for fresh US dollar trades while the speech by the ECB President Draghi is also likely to have a major impact on the Euro.
EUR/USD Technical Levels
“Return above falling 100SMA (1.1666) is a bullish signal, reinforced by attempts to form 5/100SMA bull-cross, for a fresh attack at 1.1733 (28 Aug high), break of which would unmask pivotal Fibo barrier at 1.1780 (38.2% retracement of 1.2555/1.1300 descend). Break here is needed to complete inverse H/S pattern on the weekly chart and signal further advance. Momentum is breaking into positive territory and supporting scenario, along with daily MA’s in bullish confirmation, which also formed multiple bull-crosses. Broken 100SMA marks initial support, followed by converged 10/20SMA’s (1.1634) which are expected to keep the downside protected. Res: 1.1724; 1.1733; 1.1750; 1.1780. Sup: 1.1666; 1.1634; 1.1616; 1.1601,” Slobodan Drvenica at Windsor Brokers noted.
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