EUR/USD rally loses steam, drops back towards 1.0750
|Looming uncertainty over the upcoming French election combined with risk-on market profile capped further advances in EUR/USD near 1.0780 region, sending the rate back towards the familiar range around 1.0755.
The EUR/USD pair stalled its extensive upmove amid a tepid recovery staged by the US dollar against its main competitors, as treasury yields stalled its rebound.
Moreover, the EUR bulls remain wary heading closer towards Sunday’s first round of the French presidential election, as the race gets tighter amongst the four presidential candidates. The latest daily Opinionway Poll showed: R1 Macron 23%, Le Pen 22%, Fillon 20%, Melenchon 19% (all unchanged from previous).
The spot rallied hard to post a high of 1.0777 over the last hours, as the yield differential between the French and German yields narrow, sending the German yields through the roof. The benchmark 10-year German bund yields rallied almost 20% to fresh nine-day highs of 0.247%, before easing sharply to now trade around 0.232%
Markets now await the US Philly Fed manufacturing index and jobless claims data for fresh momentum. Apart from data, the US treasury secretary Mnuchin’s speech will also have a significant impact on the spot.
EUR/USD Technical Levels
Technical resistances for the pair are aligned at 1.0777 (3-week tops), 1.0800 (round number) and finally 1.0827 (Mar 29 high). On the flip side, the spot finds next support at 1.0702/00 (Daily pivot/ round number), a break below that level could open the door to 1.0663/60/59 (5, 20 & 50-DMA) and 1.0600 (classic S2/ Fib S3).
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