EUR/USD refreshes session tops, 1.23 handle back on sight
| • Continues gaining traction amid notable USD weakness.
• DXY struggles to find support from surging US bond yields.
• Likely to consolidate ahead of next week’s ECB decision.
The EUR/USD pair continued gaining some positive traction during the early European session and refreshed session tops, around the 1.2275-80 region in the last hour.
The pair traded with a positive bias for the second consecutive session on Friday and has now recovered over 100-pips from weekly lows touched in the previous session. Persistent US Dollar selling bias was seen as one of the key factors behind the pair's steady up-move.
Despite the ongoing upsurge in the US Treasury bond yields, with 10-year yields hitting the highest levels since 2014, the greenback was unable to find any support and continued drifting lower amid concerns about a potential US government shutdown.
With the USD price dynamics acting as an exclusive driver of the pair's momentum, the market also seems to have shrugged off the recent jawboning by several ECB officials.
It, however, remains to be seen if bulls are able to retake the 1.2300 handle, or the pair enters a bullish consolidation phase ahead of next week's key event risk - the ECB monetary policy decision.
In the meantime, today's release of Prelim UoM Consumer Sentiment from the US and Fedspeaks would be looked upon to grab some short-term trading opportunities on the last trading day of the week.
Technical levels to watch
A follow-through buying interest has the potential to boost the pair back above the 1.2300 handle back towards 3-year highs resistance near the 1.2320-25 region.
On the flip side, any pull-back below mid-1.2200s is likely to find support near the 1.2225-20 region and is closely followed by the 1.2200 handle, which if broken could drag the pair back towards weekly lows support near the 1.2165 area.
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