- EUR/USD seems to have settled above 1.1300 early Thursday.
- Falling US Treasury bond yields cap the dollar's upside.
- Recovery remains technical in nature in the absence of fundamental drivers.
EUR/USD has managed to close above 1.1300 and seems to have gone into a consolidation phase in the early European session on Thursday. The technical outlook suggests that the recovery could continue but the pair remains at the mercy of the dollar's valuation.
The benchmark 10-year US Treasury bond yield, which gained more than 10% since the US inflation data on November 10, fell nearly 3% on Wednesday and caused the greenback to lose interest. Currently, the yield is holding below 1.6% and unless it manages to reclaim that level, the dollar could find it difficult to regather its strength.
Additionally, US stock futures are trading in the positive territory, suggesting that risk flows could support EUR/USD on Thursday.
Nevertheless, sellers are unlikely to give up easily on the possibility of the pair falling further. European Central Bank (ECB) Governing Council Member Isabel Schnabel said that the ECB's decision to continue to buy bonds was a sign that a rate hike was not imminent. Schnabel further added that the rise in inflation was a welcome development.
There won't be any high-tier macroeconomic data releases in the remainder of the day and market participants will remain focused on the US T-bond yields and the risk perception.
EUR/USD Technical Analysis
Following the sharp decline witnessed earlier in the week, the Relative Strength Index (RSI) indicator on the four-hour chart rose above 30, which could be seen as an encouraging sign for the bulls. Additionally, EUR/USD is currently trading above the descending regression channel coming from November 9. In case sellers fail to bring the pair back within that channel, additional recovery gains could be witnessed.
1.1340 (static level) aligns as initial resistance before the 1.1350/60 area (static level, 20-period SMA). With a daily close above the latter, EUR/USD could target 1.1400 in the near term.
On the downside, 1.1300 (psychological level, descending regression channel) could be seen as the first support ahead of 1.1260 (16-month low) and 1.1200 (psychological level).
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.
Recommended Content
Editors’ Picks

EUR/USD bounces off lows, approaches 1.1550
EUR/USD continues to recover ground lost and now extends the rebound to the 1.1550 zone on Friday. Meanwhile, the US Dollar maintain its bullish bias intact in response to a significant flight to safety amid increasing geopolitical concerns, while positive consumer sentiment data also contribute to the daily uptick.

Gold keeps the trade above $3,400 on safe-haven demand
Gold prices maintain its upward trajectory on Friday, reaching its peak level since late April above the $3,400 mark per troy ounce. Furthermore, the precious metal draws increased safe-haven interest amid escalating tensions in the Middle East, triggered by Israel's military action against Iran.

GBP/USD trims losses, retargets 1.3600
After an earlier dip toward the 1.3520 area, GBP/USD has regained some composure, trading within sight of the key 1.3600 barrier as the week draws to a close. The pair remains under pressure on Friday, weighed down by renewed US Dollar strength amid rising risk aversion and a stronger-than-expected consumer confidence report.

Crypto Today: Bitcoin, Ethereum, XRP clamber for support amid escalating volatility on Israel-Iran tensions
The cryptocurrency market has been hit by a sudden wave of extreme volatility, triggering widespread declines as global markets react to tensions between Israel and Iran. Bitcoin is hovering at around $104,668 at the time of writing on Friday, following a reflex recovery from support tested at $102,513.

Week ahead – Markets brace for central bank barrage amid heightened uncertainty
Fed officials to stand pat as they await further clarity. A dovish BoJ could push rate hike expectations into 2026. Deflation fuels speculation about negative SNB rates. BoE may sound more dovish after disappointing UK data.