EUR/USD may suffer another frustrating setback at 1.2150 as US yields bite
|EUR/USD has advanced amid optimism about stimulus and vaccines. The pair is set to break the 1.2150 double-top but rising US yields may push the dollar back up, Yohay Elam, an Analyst at FXStreet, reports.
Key quotes
“Europe's coronavirus situation has been improving with another day of fewer cases in Germany and also a pickup in the old continent's vaccination campaign. After several snags, deliveries of doses from Pfizer/BioNTech, Moderna and AstraZeneca have resumed and are pushing immunization higher.”
“President Joe Biden is set to advance a bill worth as much as $1.9 trillion. Both the White House and the Federal Reserve brushed aside concerns of overheating and inflation. However, markets have begun factoring in elevated growth – and price pressure – prospects. Yields on US Treasuries have hit a new 11-month high above 1.23%. The increase in returns previously pushed the dollar higher with it.”
“So far, investors have been abandoning the dollar in a ‘risk-on’ mood, but that may change. Lael Brainard, Governor at the Federal Reserve, speaks later in the day and may shed light on what the bank thinks about higher inflation prospects.”
“Critical resistance awaits at 1.2150, which has capped EUR/USD on Tuesday and also last week – a double-top. Further above, 1.2190 and 1.2225 are eyed.”
“Some support is at the daily low of 1.2125, followed by 1.2080, a swing low from last week. A more significant cushion is at 1.2055.”
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