EUR/USD Current Price: 1.0821
- European stock markets are struggling to retain the green amid resurgent government yields.
- Market players keep an eye on JGBs, pressuring the upper end of BoJ’s range.
- EUR/USD maintains its bullish stance despite easing from a fresh multi-month high.
The EUR/USD pair started the week with a firm tone, peaking during Asian trading hours at 1.0873, a fresh multi-month high, but eased sharply early in Europe to post a daily low of 1.0801. It currently trades in the 1.0820 price zone, unchanged for the day. In general, the action was linked to the market’s sentiment as the better tone of Asian stock markets provided support to the high-yielding Euro.
European indexes, however, are struggling to retain the green, while government bond yields are on the rise, supporting the US Dollar. Eyes are on Japan Government Bonds (JGB) as the yield on the 10-year note is up to 0.52%, pushing the upper end of the BoJ’s range. US government bond yields are also up, with the 10-year Treasury note currently yielding 3.50% and the 2-year note offering 4.22%.
Data-wise, the macroeconomic calendar will remain light throughout Monday. Germany published the December Wholesale Price Index, up 12.8% YoY, easing from the previous 14.9%. The United States will not publish relevant macroeconomic figures as the US celebrates the Martin L. King holiday.
EUR/USD short-term technical outlook
The EUR/USD pair maintains its bullish bias, despite struggling to retain gains. The daily chart shows that the pair remains well above the 61.8% retracement of the 2022 decline at 1.0745, a critical support level. At the same time, technical indicators eased modestly but remain within positive levels. Finally, the 20 Simple Moving Average (SMA) maintains its upward slope far below the current level and above the longer ones, in line with the dominant trend.
In the near term, and according to the 4-hour chart, the risk is also skewed to the upside. Technical indicators have turned flat within positive levels after correcting overbought conditions reached last week, suggesting limited selling interest. Meanwhile, a firmly bullish 20 SMA provides dynamic support while advancing above the longer ones.
Support levels: 1.0800 1.0745 1.0695
Resistance levels: 1.0870 1.0910 1.0950
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