Breaking: EUR/USD hits a new 13-month high, approaches 1.1100
- EUR/USD rallied to a fresh multi-month high, nearby 1.1100.
- Fears around another round of a banking crisis in the US weighed on the odds for a Fed 25 bps rate hike.
The EUR/USD soars sharply above the past yearly high of 1.1076 and hits a 13-month high at around 1.1095. Concerns about the health of regional banks in the United States (US) triggered flows outside the US Dollar (USD), as shown by the US Dollar Index (DXY), collapsing 0.75%. At the time of writing, the EUR/USD is trading at 1.1067.
US Treasury bond yields, and the risks of a banking crisis in the US, the drivers of EUR/USD’s jump
As the North American session began, the EUR/USD achieved a daily high shy of the 1.1100 figure, as First Republic Bank, which took over Silicon Valley Bank (SVB), witnessed its shares plunge 49% on Tuesday, as deposits shrank. That sparked fears of a possible contagion and a potential pause on the US Federal Reserve (Fed) tightening cycle. Therefore, the greenback fell.
US Treasury bond yield dropping is one reason for the EUR/USD’s rise. Additionally, expectations for a US Federal Reserve 25 bps rate hike diminished to 75.3%, compared to 1 week 83.3%.
EUR/USD Market Reaction
The EUR/USD jumped from around the R1 daily pivot at 1.1040 and accelerated its uptrend towards the 1.1095 multi-month high, some pips of reaching the R1 daily pivot. Though it has retraced some 30 pips from the daily high, buyers are still in charge of the uptrend, and the 1.1100 figure is still in sight.
EUR/USD Technical Levels
Author
FXStreet Team
FXStreet
