It appears the Euro-Dollar pair may snap its three-day losing streak as the currency pair as the currency has breched key fibo of 1.1019 (76.4% of 1.0911-1.1366). However, the question is whether the spot would breach 1.10 handle.
Focus on yield spread
The answer to the question whether the pair would hold above 1.10 handle lies in the US-German bond yield spread. Treasury yields are on the rise, given the market sees a high probability of Fed raising rates in December.
However, ECB QE Taper talk quickly fizzled out, thus leaving room for German bund yields to revisit its recent lows. Strengthening of US-German yield spread could result in a break below 1.10 levels.
Later in the day, we have German final CPI reading which may go unnoticed unless there is significant upward/downward revision. Meanwhile, US initial jobless claims and Fed speak are more likely to influence the pair.
As of now, the currency pair is trading around 1.1030 levels after having clocked a high of 1.1036. Dismal China data appears to have strengthened the bid tone around funding currencies – EUR and JPY.
EUR/USD Technical Levels
The pair was last seen trading around 1.1015. Acceptance above 1.1046 (Aug 5 low) could yield a much stronger retracement of the three-day losing streak to 1.1085 (5-DMA), above which a major hurdle is noted directly at 1.11 handle. On the lower side, breach of 1.10 could result in a slide to 1.0952 (July 25 low) and 1.0911 (Brexit day low).
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.