• EUR/USD has turned south after having tested 1.0600 on Thursday.
  • Rising US Treasury bond yields support the greenback early Friday.
  • Additional losses toward 1.0460 could be witnessed if 1.0520 support fails.

EUR/USD has started to edge lower early Friday after having tested 1.0600 on Thursday. The risk-positive market environment helps the shared currency stay resilient for the time being but the greenback could continue to gather strength and weigh on the pair in case US Treasury bond yields gain traction.l

On Thursday, the 10-year US Treasury bond yield declined for the second straight day and caused the dollar to lose interest. Meanwhile, the Swiss National Bank's unexpected 50 bps rate hike allowed the CHF to capture safe-haven flows and made it difficult for the greenback to find demand.

On the other hand, citing sources familiar with the matter, Bloomberg reported on Thursday that the European Central Bank (ECB) was planning to sell its holdings of lower-yielding European bonds to buy higher-yielding ones. In turn, the 10-year German bond yield climbed to its highest level since early 2014, providing an additional boost to the shared currency.

Early Friday, the 10-year US T-bond yield is rising while the German 10-year yield is edging lower, opening the door for a downward correction in EUR/USD.

Later in the session, May Industrial Production data will be featured in the US economic docket. FOMC Chairman Jerome Powell is scheduled to deliver a speech as well. Powell, however, is unlikely to touch on the policy outlook ahead of the semi-annual testimony before the US Senate next week. Ahead of the weekend, the currency's action is likely to be impacted by yields.

EUR/USD Technical Analysis

The pair was last seen trading slightly below 1.0520, where the Fibonacci 38.2% retracement of the latest downtrend is located. In case the pair starts using that level as resistance, 1.0460 (Fibonacci 23.6% retracement, 20-period SMA) could be seen as the next bearish target ahead of 1.0400 (static level, psychological level).

On the upside, 1.0560 (Fibonacci 50% retracement) aligns as interim resistance before 1.0600 (Fibonacci 61.8% retracement, 200-period SMA) and 1.0640 (100-period SMA).

Meanwhile, the Relative Strength ındex (RSI) indicator on the four-hour chart is now moving sideways slightly above 50, suggesting that the pair has failed to gather bullish momentum.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

GBP/USD defends 1.1900 after mixed UK Retail Sales

GBP/USD defends 1.1900 after mixed UK Retail Sales

GBP/USD is off the lows but remains vulnerable amid mixed UK Retail Sales and broad USD strength. The UK Retail Sales surprised positively, with a 0.3% rise MoM in July. On an annualized basis, UK consumer spending fell 3.4% vs. 3.3% expected. 

GBP/USD News

EUR/USD drops towards 1.0050 amid recession woes, hawkish Fed bets

EUR/USD drops towards 1.0050 amid recession woes, hawkish Fed bets

EUR/USD holds lower ground near the monthly bottom, approaching 1.0050 as the US dollar trades firmer amid a sluggish European morning. Fears of German recession, geopolitical concerns and hawkish Fedspeak weigh on the major currency pair.

EUR/USD News

Gold: Firmer DXY directs bears towards $1,730

Gold: Firmer DXY directs bears towards $1,730

Gold price takes offers to renew monthly low near $1,750 during early Friday morning in Europe. The bullion prices register the five-day downtrend as the US dollar bulls cheer recession woes, as well as firmer US data and hopes of the Fed’s aggression vis-à-vis rate hikes.

Gold News

AVAX price will give holders an opportunity to get out before another 20% crash

AVAX price will give holders an opportunity to get out before another 20% crash

AVAX price is in a tough spot as it approaches the end of its uptrend that has been ongoing for two months. While bearish as the altcoin looks, a minor relief rally or bounce could help investors cash out before another leg down. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Majors

Cryptocurrencies

Signatures